President of ECOWAS commission, Mr Jean-Claude Brou, said the Task Force on Single currency for the bloc would brainstorm to assess the initiative.
Brou said while presenting the Community Work Programme at the ongoing ordinary session of the ECOWAS Parliament in Abuja that the task force would meet in June.
The commission’s president said that stakeholders in the region’s economic and finance sectors, including the central banks and ministers of finance, had been deliberating on the single currency.
“The single currency is a topic that is very important because it completes the free movement of persons for a single market and if there is a single currency, one can carry out trade and there is need for harmonisation.
“Deliberations are being carried out with the central banks and the ministers of finance in the region and some key issues are being discussed.
“Issues such as the convergence criteria, the best exchange regime to adopt with challenges and costs involved so as to give the best conditions for the community.
“The studies that are being carried out would be completed by next month so that we can have the proposals and make progress.”
Brou said that the meeting would determine the possibility of achieving the single currency by 2020 set by the Heads of State.
“It will be on the basis of the results of all the studies on the assessment that is
currently being done that we will see where we stand exactly but the objectives have been set by the Heads of State,” he said.
The Authority of Heads of State and Government had set aside 2020 for West African countries to achieve the single currency which would promote economic integration.
The commission’s president, while presenting the community report to the parliament in November 2018, said that many member states had yet to meet the macroeconomic convergence criteria required for a monetary union.
The three primary criteria that are being used are a budget deficit of not more than three per cent; average annual inflation of less than 10 per cent with a long term goal of not more than five per cent by 2019; and gross reserves that can finance at least three months of imports.The three secondary convergence criteria that have been adopted by ECOWAS are public debt/Gross Domestic Product of not more than 70 per cent; central bank financing of budget deficit should not be more than 10 per cent of previous year’s tax revenue; and nominal exchange rate variation of plus or minus 10 per cent.
