Expert questions the timing for the issuance of ECOWAS’ single currency, ECO

According to him, although the rationale behind the issuance is a good one, the timing is not ideal.

Mr Amarteye-Anim’s comments follow reports that ECOWAS heads of state gave their blessing to the introduction of the common currency next year. The decision was reached at a meeting in Abuja Nigeria on Sunday.

“If you look at the subregion, most of the dominant economies are not doing too well. Nigeria just recovered from an economic downturn and is yet to get on a strong footing. Ghana is now going through so many reforms to ensure that we have a strong and resilient economy,” he said.

There is a roadmap is to ensure that all member countries meet three primary criteria for the adoption of the currency.

The criteria for adoption include member countries having a budget deficit of not more than 3%; average annual inflation of less than 10% with a long-term goal of not more than 5% by 2019.

Countries were expected to also have gross reserves that can finance at least three months of imports. The single currency is expected to boost trade in the region and make doing business easier.

But the Economist says most economies in the sub-region are not economically sound to support the use of the currency.

He said once the very dominant economies are not doing too well, it will not be proper to issue a single currency within the timeline given, noting that, “You need strong economies to serve as the backbone to support the totality of the sub-region.”