Ghanaian economist, Prof Quartey, says implementation of ECO currency shouldn’t be rushed

A Ghanaian economist, Prof Peter Quartey, has said that it is prudent to further delay the implementation of the ECO currency to ensure there is better and broader consultations among all stakeholders.

Prof Peter Quartey

His comment is coming after the Governor of the Bank of Ghana (BoG); Dr Ernest Addison, said that the introduction of the currency may not happen this year due to some unresolved issues.

Prof Peter Quartey told Accra-based Citi FM that it is important to hold further consultations on the vision.

“If you look at the conditions precedent for us to issue the ECO, that is the primary convergence criteria, and the secondary convergence criteria, we haven’t met most of them, and often times when we meet them one year, then the following year, we are unable to meet them, and it is not just related to Ghana. Most of the member states have not been able to meet them.”

“So, it is certainly better to postpone the issuance of the ECO, than to rush into it and pay the consequences. There are some advantages, but the cost of rushing into it will far more outweigh the advantages or benefits. So, there is no point rushing into it. In the end, the net benefit will be negative and disastrous for our economies,” he added.

ECO is the proposed name for the common currency that the West African Monetary Zone intends to introduce in the framework of the Economic Community of West African States (ECOWAS). The sub-region has struggled to introduce the currency since the year 2000.

In 2019, Dr Addison, said the approach towards the adoption of the ECO, as a common currency for the West Africa sub-region, could fall short again.

He added that the implementation of the ECO must at least begin with countries in the region that trade significantly among themselves.

The long delay in issuing the ECO is due to the inability of the 15 ECOWAS countries to meet the 10 point convergence criteria they set for themselves.

These include an inflation rate of less than 5%, a budget deficit of not more than 3% of GDP, and that each country must have enough foreign reserves to cover at least three months of imports.

The leadership of ECOWAS met in Abuja, Nigeria in 2019, where one of the resolutions was for member-countries to adopt the common currency effective 2020.

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