None of the 15 ECOWAS member nations have yet met the major convergence requirements for the adoption of the subregion's single shared currency.
This is due to a lack of money and other geopolitical reasons that have been cited as stumbling blocks to the adoption of the single currency.
Commissioner for Macroeconomic Policy and Economic Research for ECOWAS, Dr. Kofi Konadu Apraku, stated at a technical committee meeting on the 'Eco' in Nigeria that the criteria that were missed by all ECOWAS member states include an annual average inflation rate of less than 10% and gross external reserves of more than 3.0 months of imports cover.
He is optimistic, though, because ECOWAS' real GDP growth rose to 4.2 percent in 2021 from -0.7 percent in 2016.
In 2020, the ECOWAS economies will be able to do better and achieve the standards.
The fiscal deficit was also reduced from 5.0 percent of GDP in 2020 to 4.6 percent in 2021. Inflation and the current account balance, on the other hand, have deteriorated.
Only nine countries, on the other hand, have satisfied all of the secondary requirements.
Dr. Konadu Apraku stated that the inflation parameters have remained unchanged since 2020.
Dr. Konadu Apraku advised that member nations execute prudent fiscal, monetary, and exchange rate policies, as well as policy measures targeted at increasing revenue mobilization and diversification of economies, in order to enhance their performance in the medium term.
"There are significant legal and regulatory gaps between member states with a functional payment systems infrastructure and those that do not."
cture and member nations that are still developing their systems To guarantee that rules and regulations are unified, all payment systems in our areas must be connected," he told the members.
Inadequate financing and technical competence have impeded the successful implementation of the plan for the ECOWAS single currency, making it difficult to complete the essential operations on time.
Dr. Konadu Apraku stated that technical help is required for the execution of roadmap programs linked to the harmonization of economic, financial, and statistical policies, as well as the harmonization of public finance frameworks.
Apart from the difficult socioeconomic climate, the damaging impacts of organized crime, particularly terrorism, and the proliferation of small guns and ammunition are even more serious.
It's a difficult problem to solve, and it's having a serious detrimental impact on the region's stability.
"In other words, the degree of convergence or divergence should not be assessed just from a macroeconomic perspective. Some of the systemic and crippling social and political concerns impacting our community need to be addressed. For the success of our Economic Integration initiative, good governance, democratic accountability, budgetary discipline, establishing an inclusive society, and respect for variety and uniqueness are all concerns that must be addressed," he said.
The committee's findings and suggestions will be presented during a virtual meeting of the Ministerial Committee on the ECOWAS Single Currency on June 13, 2022.
The Ministerial Committee's decisions will then be presented to the ECOWAS Heads of State and Government for deliberation at the next summit.
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