President Muhammadu Buhari has revealed the reasons why it will be difficult to implement the proposed single currency for member countries of Economic Community of West African States, ECOWAS.
Buhari, while urging member states to tread carefully in pushing for a single currency in the sub-region by 2020, cited the challenges faced by the European Union, EU, who have a similar agenda.
He noted that the necessary economic fundamentals among countries continue to differ over the years, making it more difficult to pull through with the project by 2020.
Buhari stated this on Tuesday at the 4th Meeting of the Presidential Task Force on the ECOWAS Currency Programme, in Niamey, Republic of Niger and was contained in a statement signed by his Special Adviser on Media and Publicity, Femi Adesina.
The President highlighted some of the obstacles to realizing the roadmap for the implementation of a single currency in the sub-region to include, diverse and uncertain macroeconomic fundamentals of many countries, unrealistic inflation targeting based on flexible exchange rate regime and inconsistency with the African Monetary Co-operation Programme.
He also stated that domestic issues in ECOWAS member countries relating to their constitutions and dependence on aids continue to affect the framework for implementing the single currency in the sub-region.
According to Buhari, “Nigeria advises that we proceed cautiously with the integration agenda, taking into consideration the above concerns and the lessons currently unfolding in the European Union. To that end, Nigeria will caution against any position that pushes for a fast-track approach to monetary union, while neglecting fundamentals and other pertinent issues.
“Although the ECOWAS Commission has anchored its pursuit of the new impetus to monetary integration on “the information presented to the Heads of State which were the basis for their recommendations”, we are concerned that we have not properly articulated and analyzed a comprehensive picture of the state of preparedness of individual countries for monetary integration in ECOWAS by 2020.
“In previous meetings, we had specifically raised observations on the state of preparedness of the member states, the credibility of the union if anchored on watered down criteria, and the continuing disparities between macroeconomic conditions in ECOWAS countries, amongst others. And I would like to reiterate this concerns.’’
The President told the Heads of State that the conditions that pushed Nigeria into withdrawing from the process in the past had not changed.
He suggested a thorough review of the convergence roadmap and the constitution of an expert committee on each of the subject areas to come up with acceptable time-frame, defined cost and funding sources identified.
He said, “Nigeria had earlier withdrawn from the process because its key questions and concerns were ignored and till date, none of the issues has come up as an agenda issue to be considered by the Taskforce. Consequently, the Roadmap which did not involve widespread consultation with national stakeholders is not sufficiently inclusive.
“This should also consider stakeholders such as the Ministries of Finance, Customs, Parliamentary groups, Tax Authorities, Immigration authorities to achieve comprehensiveness.’’
The President said there should be a push towards ratification and domestication of legal instruments and related protocols, while fiscal, trade and monetary policies and statistical systems, which had not gone far, could be harmonized.
President Buhari noted that the West African Economic and Monetary Union (UEMOA) countries should make a presentation on a clear roadmap towards delinking from the French Treasury.
He also advised an examination of the African Union position on the same issue, which the African Central Bank Governors, in line with the African Union programme of monetary convergence, recommended a convergence deadline of 2034 for the establishment of Regional Central Banks in all sub-regions.
In his remarks, the President of the ECOWAS Commission, Marcel Alain de Souza, said the single currency for the West African sub-region was a laudable and historical project, but regretted that it had taken too long to be actualized.
The President said the creation of a Central Bank for the West Coast would accelerate the process.
He noted that Nigeria constitutes more than 70 percent of the GDP of the West African region, with a population of 180 million, and would play a significant role in facilitating the process of realising a single currency for the sub-region.