Ghana gradually meeting criteria for West Africa common currency, ECO - Economist

Dr. Ebenezer Mensah Ashley, an economist, has said, Ghana has an economic module, which is moving from a tax base economy to a production base economic approach. He was responding to a question posed to him by Frontline host, Kwame Tutu on whether Ghana has an economic module.

The module he explained involves the expansion or widening of the tax net and encouraging more production to reduce the dependence on imports.

Dr Mensah Ashley said, the country would benefit if we have more businesses expanding so owners will pay their taxes instead of increasing the tax rate. ‘’A production base economy is one that creates more jobs.

That is our focus now as a country. It is an economic approach that will benefit Ghanaians if well executed.’’ He indicated that people are discouraged in paying their taxes when it keeps increasing but when it is reduced or stabilized at a reasonable rate, people would be encouraged to pay, he insisted.

Commenting on the recent Ghana’s rating from ‘B-‘ to ‘B’, he said, this is positive for the country. ‘’This is a clear indication that we have strong economic fundamentals,’’ he suggested. Ghana he added is gradually meeting the three major requirements earmarked for the single currency for the sub-region.

West African leaders in February this year reaffirmed their political will to meet the Economic Community of West African States (ECOWAS) single currency programme by 2020.

The leaders made the commitment at the fifth meeting of the Presidential Task Force on the ECOWAS single currency programme in Accra, Ghana. President Akufo-Addo at the programme urged African leaders to work towards achieving the convergence criteria needed for the implantation of the single currency.

The four primary criteria to be achieved by each member country are: A single-digit inflation rate at the end of each year, a fiscal deficit of no more than 4% of GDP, a central bank deficit-financing of more than 10% of the previous year’s tax revenue and gross external reserves that can give import cover for a minimum of three months.

Commenting on the criteria, Dr. Ashley Mensahconfidently said, Ghana is on track at meeting these key requirements based on our strong economic fundamentals.

The idea to have West Africa spend the ECO was birthed two decades ago. ECO is the proposed name that ECOWAS Monetary Zone plans to introduce. The aim is to merge ECO with West African CFA France, which is used by French-speaking members of ECOWAS, and then ultimately create a common currency for West Africa.