Director of ISSER, Prof. Peter Quartey
Economist, Prof. Peter Quartey, says a further delay in the implementation of the ECO currency is prudent to allow for better and broader consultations among all stakeholders.
His comment follows the assertion by the Governor of the Bank of Ghana, Dr Ernest Addison that the introduction of the currency may not happen this year due to some unresolved issues.
ECO is the proposed name for the common currency that the West African Monetary Zone plans to introduce in the framework of the Economic Community of West African States (ECOWAS).
Though ECOWAS has struggled to introduce the currency since the year 2000, Prof. Peter Quartey told Citi Business News further engagements on the vision are necessary.
“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,” he said.
He stated that it was better to postpone the issuance to avoid future consequences.
“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.
Last year, the Governor of the Bank of Ghana, Dr. Ernest Addison, advised that the approach towards the adoption of the ECO, as a common currency for the West Africa sub-region, could fall short again.
He said the implementation of the common currency must be started by at least countries in the region that trade significantly among themselves.
The leadership of the Economic Community of West Africa States (ECOWAS) last year met in Abuja, Nigeria, where one of the resolutions was for member-countries to adopt the common currency effective 2020.
The long delay in issuing the ECO has been caused by 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 five per cent, a budget deficit of not more than three per cent of GDP, and that each country must have enough foreign reserves to cover at least three months of imports.
