West Africa needs political commitment to roll out single currency – GITFiC

West Africa needs po­litical commitment at the highest level for the successful launch and roll out of the proposed single currency, the Ghana International Trade and Finance Conference (GITFiC) has said.

It said the postponement of the launch of ECO the currency, was a sign of Economic Community of West African States (ECOWAS) leaders’ feeble political will towards the economically beneficial move.

This is a recommendation made by GITFiC’s Lead-Research Fellow (Policy and Advocate), Gerald Ekow Woode, in a research entitled “The Next Wave: Africa’s Single Currency” and copied to the Gha­naian Times, yesterday.

It said; “In order to advance the goal of a single currency within a realistic timeframe, it is necessary to establish strong political will that would motivate concrete reforms and policy frameworks.

“To share expertise, align pol­icies, and increase capacity for a currency union, there is a need for close coordination between do­mestic institutions (such as central banks) and regional bodies like the West African Monetary Institute.”

The ECOWAS, since its concep­tion in 2003, has postponed the launch of a single currency at least four times: in 2005, 2014 and 2020 for various reasons.

The 2020 postponement was blamed on the COVID-19 pan­demic and the failure of many countries to meet the criteria for the 2027 launch including curbing inflation, budget deficits, financ­ing, reserves and exchange rate stability.

The GITFiC research aimed to contribute to examine West Africa’s benefit from the move as well as emphasise the significance of taking a regional strategy to solving West Africa’s monetary problems.

The second recommendation of research was that West African economies should widen their focus to include regional industrial policy in addition to simply satisfy­ing the convergence criteria.

“This is required to increase industrial production, which would serve as the foundation for in­tra-regional commerce, and lessen reliance on commodity windfalls that could cause ad hoc shocks to their economies,” it said.

However, the research said achieving this goal would neces­sitate close cooperation in the sub-industrial region’s strategy development as well as in the im­plementation of structural reforms that foster enabling environments, such as building cross-country infrastructure, modernising institu­tions, removing non-tariff barriers, and establishing sound policy frameworks.

The third recommendation, was the call for robust political union that places pan-Africanism at the forefront of the agenda and that it should not be politically dominated by nations with larger economies, particularly Nigeria; rather, there should be equality to advance the bloc.

“Moreover, it should have a strong system of fiscal insurance, wherein underperforming nations receive financial assistance from performing nations. A more pow­erful bloc with widespread backing would result from this,” it said.

On the benefits of the common currency, the research said, it would make economies immune to global shocks; deepen economic integration; lead to flex­ible exchange rates as well as help resolve conflicts to ensure stability.