Member countries of the Economic Community of West African States (ECOWAS) have been warned by President Muhammadu Buhari, to reconsider the subregion’s plan for monetary integration come 2020.
Having observed that ECOWAS leaders had not assessed the situation of things in regards to how prepared individual countries would be for monetary union by 2020, Nigerian President, through the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele, on Tuesday, stressed the need to reexamine the impact of such move on the region’s economy.
A currency union/monetary integration is when two or more groups (usually countries) share a common currency or decide to peg their exchange rates to keep the value of their currency at a certain level, as well as synchronize and manage each country’s monetary policy.
Recognizing the need for strong political commitment to pursue national policies that would facilitate the regional monetary integration process, leaders of six West African countries declared their intention to proceed to monetary union among the non-CFA franc countries of the region in 2003, creating a convergence Council to help coordinate macroeconomic policies; and set up a common central bank.
Differences in macroeconomic conditions of ECOWAS countries, presentation of a clear road-map to an integrated currency union and current inflation targeting regime are areas that need to be addressed before a real convergence can be achievable, President Buhari pointed out.
While addressing West African countries representatives at the 5th meeting of the Presidential Task Force on ECOWAS Currency Programme in Accra, Ghana, the CBN governor noted that the Nigerian Presidency requests that an Ombudsman is established, to ensure that member countries are sanctioned when they breach agreed standards, protocols and convergence criteria.
In order to reduce the level currency policy discrepancies, President Buhari recommended an immediate approval and domestication of legal measures and protocols, as well as the synchronization of all fiscal, trade and monetary policies and statistical systems, adding that harmonizing ECOWAS members plans with that of the African Union Programme of monetary convergence of establishing regional central banks in all sub-regions of the continent latest 2032, would help fast-track monetary integration in the region.