Head of the Economics Department at the University of Ghana says he believes that the foundation for the implementation of the West African single currency, the ECO, has not been well laid out.
Professor Baah Boateng, however, believes that the extent to which trade is facilitated in the sub-region is rather limited with little to no regional integration hence, unresolved border issues could hamper the currency’s introduction.
“The foundation has not been well laid out to be able to implement the ECO, the principles of economics, for example, tells you that the introduction of any currency, especially a common currency is supposed to be based on trade and without trade, any currency introduction is just a common paper,” Prof. Boateng told JoyNews.
“If we look at the 15 West African countries, the extent to which we trade amongst ourselves is very limited with little to no regional integration”, he added.
As an example, he cited that Nigeria currently accounts for 70 percent of total Gross Domestic Product (GDP) with 57 percent of total population adding that; “all the countries will become a back yard of Nigeria if the foundations are not well laid to implement the West African single currency”
Prof. Baah Boateng advised that governors of African central banks chart a common path to an effective monetary and fiscal system to improve trade numbers considering the current low trade volumes among some member states.
Governors of Central Banks in the ECOWAS sub-region are currently meeting in Abuja, Lagos to begin talks and deliberations on issues relating to the introduction of the single currency, the ECO, slated for 2020.
The committee of Central Bank governors are expected to discuss the implications of the recent announcement by the French-speaking countries in ECOWAS on the proposed introduction of the single currency the ECO to replace the CFA franc.
The talks will further determine the way forward for the member states of the West African Monetary Zone (WAMZ) in line with the road map for the introduction of the single currency - the ECO.
The ECOWAS Technical Team, however, is expected to present proposals made by the West African Monetary Institute about the ECO.