Don’t rush to adopt ECOWAS cur­rency, ex­perts tell FG

The Punch - - FRONT PAGE - Ifeanyi Onuba and Anna Okon

SOME fi­nance and eco­nomic ex­perts have called on the Fed­eral Gov­ern­ment not to rush into join­ing the West Africa sin­gle cur­rency ar­range­ment that would make Nige­ria to adopt the “Eco” as its of­fi­cial cur­rency in­stead of the naira.

The ex­perts who spoke to our cor­re­spon­dents in sep­a­rate tele­phone in­ter­views said such move would not be ben­e­fi­cial for Nige­ria at this time when many of the ECOWAS coun­tries had yet to meet the con­ver­gence cri­te­ria set for the mone­tary union.

Those that spoke in­cluded a pro­fes­sor of eco­nom­ics at the Olabisi On­a­banjo Univer­sity Agoi­woye, Ogun, Sher­iffdeen Tella; the Regis­trar, In­sti­tute of Fi­nance and Con­trol of Nige­ria, Mr God­win Eo­hoi; and a de­vel­op­men­tal economist, Odilim En­wag­bara.

Eight West African coun­tries had last week de­cided to change their cur­rency’s name from CFA to Eco.

The coun­tries were Benin Repub­lic, Burk­ina Faso, Guinea-bis­sau, Ivory Coast, Mali, Niger, Sene­gal and Togo.

All of these African coun­tries are for­mer French colonies with the ex­cep­tion of Guinea-bis­sau.

The Fed­eral Gov­ern­ment had on Mon­day said it was study­ing the de­ci­sion and would take ac­tion on the de­vel­op­ment soon.

Eco is the name of the cur­rency that is be­ing adopted by ECOWAS coun­tries un­der its sin­gle cur­rency regime for the West Africa sub-re­gion.

The idea of the sin­gle cur­rency for the West African re­gion was first mooted al­most 30 years ago in the hope of boost­ing cross-bor­der trade and eco­nomic de­vel­op­ment.

There are three pri­mary and three sec­ondary cri­te­ria that a coun­try must achieve to be in­cluded in the mone­tary union.

So far, only Togo had met all the con­ver­gence cri­te­ria within the last two years for the mone­tary union

Tella urged the Fed­eral Gov­ern­ment to be mind­ful of the in­her­ent risks be­fore tak­ing a de­ci­sion on the mone­tary con­ver­gence.

Tella said, “The fran­co­phone coun­tries have al­ways been un­der a mone­tary union and so it’s quite easy for them to ful­fil some of these cri­te­ria.

“The Fed­eral Gov­ern­ment should not study it alone, it should do so to­gether with other an­glo­phone coun­tries to­gether.

“You can­not have a per­fect con­di­tion to start a mone­tary union.

“Those coun­tries that are cham­pi­oning it should come to­gether with the lit­tle ones like Liberia, Sierra Leone, Gambia and hold a meet­ing and de­ter­mine the time to join.”

He said while Nige­ria had a huge mar­ket and ac­count for the largest econ­omy within the re­gion, the Fed­eral Gov­ern­ment should come up with a five to 10-year in­dus­tri­al­i­sa­tion agenda to en­able it to en­joy the ben­e­fits of the mone­tary union.

In his com­ments, Eo­hoi said while the sin­gle cur­rency ini­tia­tive would fa­cil­i­tate trade, there was need a for Nige­ria to be cau­tious be­fore en­ter­ing the mone­tary union.

He said, “The sin­gle cur­rency would have been good for in­ter­na­tional trade within the African con­ti­nent but we need to be cau­tious.

“We should study the ter­rain very well so that we will not just go into a deal that will af­fect us. You can see that the African coun­tries are re­ly­ing on Nige­ria to grow their economies.”

En­wag­bara said that Nige­ria should not join the mone­tary union if the cur­rency to be adopted was not de­nom­i­nated in naira.

He said, “Eco has been hi­jacked by France and tak­ing it to Europe is an in­sult to Africa be­cause we are not a colony of Europe.

“Nige­ria is not sup­posed to join such cur­rency un­less such a cur­rency is in form of the naira be­cause we are the largest econ­omy in Africa and the econ­omy of the whole West Africa added to­gether is not up to half of the Nige­rian econ­omy.”

Adop­tion of ECO, wakeup call

for Nige­ria, oth­ers

The Direc­tor Gen­eral, La­gos Cham­ber of Com­merce and In­dus­try, Dr Muda Yusuf, on the other hand, said the adop­tion of the Eco by fran­co­phone West African coun­tries was a wake-up call for Nige­ria and the an­glo­phone coun­tries.

Yusuf noted the adop­tion pre­sented a strong sig­nal of the readi­ness of the coun­tries to ad­vance the cause of eco­nomic in­te­gra­tion in the sub-re­gion.

He said, “The mone­tary union rep­re­sents a much higher level of eco­nomic in­te­gra­tion.

“Although be­yond the sig­nalling ef­fect, not much would change as a re­sult of change of name from the CFA to Eco. The cur­rency will still have some link to the Euro, since France is a mem­ber of the EU.”

Yusuf noted that the pace of eco­nomic in­te­gra­tion among the fran­co­phone coun­tries was faster than in the an­glo­phone West African coun­tries.

“In a sense, it is a wake-up call for Nige­ria and other An­glo­phone coun­tries in the sub-re­gion. These coun­tries need to make up their minds about their com­mit­ment to the vi­sion of eco­nomic in­te­gra­tion,” he said.

He pointed out that the adop­tion of a com­mon cur­rency had long been on the eco­nomic in­te­gra­tion agenda of the Eco­nomic Com­mu­nity of West African States, adding that this should have been ac­com­plished as far back as year 2000, go­ing by the in­te­gra­tion pro­gramme of ECOWAS.

“Nine­teen years af­ter, the sub­re­gion is still grap­pling with the pre­lim­i­nary phases of eco­nomic in­te­gra­tion, which are the free trade area and the Cus­toms union,” he stated.

Yusuf said the adop­tion was a fit­ting pre­cur­sor to the com­mence­ment of the African Con­ti­nen­tal free Trade Area agree­ment.


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