ECOWAS Takes Decision On Single Currency.
The West African Monetary Zones (WAMZ) have faced considerable obstacles in their quest to unify their member states’ currencies, and it is taking longer than expected to achieve their goals.
During the 51st Convergence Council of WAMZ meeting, which took place in Abuja over the weekend, Olorunsola Olofeso, the director-general of the West African Monetary Institute (WAMI), disclosed this development.
Dr. Olofeso claims that there has been a noticeable drop in the main convergence indicators, which are essential benchmarks that member states need to reach in order to establish the monetary union.
This loss casts doubt on the viability of the region’s long-standing attempt to integrate economically by implementing a single currency in the near future.
The goal of the pursuit of a single currency is to promote trade, ease transactions throughout West Africa, and promote economic stability.
Achieving these convergence requirements has been extremely difficult, nevertheless, because of the member states’ disparate fiscal deficits, inflation rates, and economic policies.
Finance ministers, governors of central banks, and other relevant parties from the WAMZ member states convened in Abuja to evaluate the state of affairs and devise plans for surmounting the current obstacles.
“As of the end of June 2023, all WAMZ Member States failed to meet all four primary convergence criteria,” he stated, citing the results of the performance assessment of Member States. In 2022, the zone’s performance score was 41.7%; however, it dropped to 29.2% in the same period.
“The medium-term projections on macroeconomic convergence, as indicated by the multi-year national macroeconomic convergence and stability programmes of the Member States, suggest that none of the WAMZ Member States will meet all the four primary convergence criteria on a sustainable basis for the remaining three consecutive years (2024-2026) of the convergence phase of the ECOWAS Single Currency Roadmap (2021-2027).”
Speaking further, Cardoso added that the Committee of governors have “Directed WAMI to update its database to reflect current and reliable statistics for policy analysis; and also convene periodic seminars on topical issues of relevance that seek to provide solutions to macroeconomic policy issues of the member states.”
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