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Sunday, September 27, 2020

Ecowas single currency take-off date not feasible

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The development came during the opening session of the 31st meeting of the committee of governors of central banks of the West Africa Monetary Zone held on July 16, in Lagos, Nigeria. 

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Playing host to the high-level meeting, Godwin Emefiele, central bank governor of Nigeria who was also elected to replace Amadou Colley, central bank governor of The Gambia as chairman of the committee said: “The launch of the monetary union by January 2015 is unlikely at this time. Despite this disappointing update, we need to use the new period created by this to redouble our efforts towards the final realisation of this objective. In this regard, there is need for the intensification of efforts toward meeting the laid down convergence criteria in the sensitisation of all stakeholders in the ratification of various WAMZ protocols and implementation. We have missed several launch dates for the monetary union. This may have informed the decision of the heads of states and governments to approve the Modified Gradualist Approach to monetary integration by 2020. Our efforts should also continue to focus on effective co-ordination between fiscal and monetary policies to support our price stability mandate, as well as create the appropriate macroeconomic environment conducive for intra-regional trade and economic development in the zone. ”

From all indications, a study conducted by the committee found the preparedness of member countries to be inadequate. This, it stated, was as a result of challenges that have hindered the performance of their economies. The study further indicated that though various countries have made remarkable progress, many could not still meet the convergence criteria for a single currency. For example, since 2009, no two countries satisfied all the four primary convergence criteria consistently for two consecutive years. While Liberia and Sierra Leone satisfied three each within this period, The Gambia, Ghana and Guinea met only two criteria each.

It would be recalled that the single currency, Eco, was first planned to be introduced in 2003, but this was postponed several times, to 2005, 2010 and 2014. Also, during a meeting of the Convergence Council of Ministers and Central Bank Governors of West Africa on May 25, 2009, the start of the currency was rescheduled to 2015 due to the global economic crisis.

The six countries that made up the WAMZ are The Gambia, Nigeria, Liberia, Sierra Leone, Ghana and Guinea. 

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