President Nana Addo Dankwa Akufo-Addo has stressed the need to accelerate Africa's industrialization agenda to mitigate the joblessness menace that is increasingly becoming a security threat to the African continent.
According to the President, the Africa industrialization goal when achieved will reduce poverty and promote inclusive economic growth.
President Akufo-Addo, who believes in the competitiveness of the African market, said the continent’s aim to settle on a single currency was not to increase the trading of goods produced in third party countries.
He, instead, stressed on the importance of African industrial development by boosting the production of goods and services to trade with Western counterparts and not only rely on producing raw materials for export.
“The era of Africa’s industrialization has dawned so that we can also trade in the world economy not on the basis of exports of raw materials but on the basis of what we make.” The president said.
Speaking at the 5th ECOWAS Presidential Task-force meeting on the attainment of a single currency by 2020, President Akufo-Addo said “Our quest for a single currency is not intended to boost trading of goods produced in third party countries. It is meant to encourage the production of goods and services within the region. It’s thus incumbent on us to strengthen the productive base of our economies and to improve agricultural productivity and industrial production.”
President Akufo-Addo reiterated that, with Africa’s population of about 350 million people, which is expected to increase to 500 million in the next 20 years and with a total of 600 million dollars GDP, there is a viable mark ready to absorb the goods which will be produced by industries in Africa.
He thus urged ECOWAS member states to renew their commitment to the ratification and implementation of the relevant ECOWAS protocols including protocols of the free movements of persons, goods and services, the ECOWAS trade liberalization scheme and the Common External Tariff (CET).
The 5th ECOWAS Presidential Task-force meeting came off Wednesday at the Accra International Conference Center. Nigerian President Muhammadu Buhari, Ivorian leader Alhassane Ouattara, President of Niger, Issoufou Mahamadou, and Togo President, Faure Gnassingbé joined President Akufo-Addo for the meeting.
Governors of Central Banks and foreign Ministers from the ECOWAS among other dignitaries were also present at the event.
Background
Eco is the proposed name for the common currency that the West African Monetary Zone (WAMZ) plans to introduce in the framework of Economic Community of West African States (ECOWAS).
ECOWAS was founded with the aim the transforming the sub-region into an economic and monetary union.
After its introduction, the goal is to merge the new currency with the West African CFA franc (used by the French-speaking members of ECOWAS since 1945) at a later date. This will create a common currency for much of West Africa
For the Eco to be implemented, ten convergence criteria, set out by the West African Monetary Institute (WAMI), must be met.
The four primary criteria to be achieved by each member country are:
1. A single-digit inflation rate at the end of each year
2. A fiscal deficit of no more than 4% of the GDP
3. A central bank deficit-financing of no more than 10% of the previous year’s tax revenues
4. Gross external reserves that can give import cover for a minimum of three months.
The six secondary criteria to be achieved by each member country are:[3]
1. Prohibition of new domestic default payments and liquidation of existing ones.
2. Tax revenue should be equal to or greater than 20 percent of the GDP.
3. Wage bill to tax revenue equal to or less than 35 percent.
4. Public investment to tax revenue equal to or greater than 20 percent.
5. A stable real exchange rate.
6. A positive real interest rate.
The last ECOWAS single Currency Programme was held in Niamey, Niger in October 2017.
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