- Former finance minister Ken Ofori-Atta has advised ECOWAS to abandon the single currency policy and focus on trade harmonization
- He argued that the convergence criteria set for the implementation of the single currency policy were unattainable for most states
- He urged the regional bloc to leverage the African Free Trade Agreement to remove trade barriers
Former finance minister Ken Ofori-Atta has urged the Economic Community of West African States to pursue trade harmonization instead of a single currency.
He explained that the economic bloc’s effort to achieve a single currency has been unachievable for too long and that efforts must be redirected to other avenues that would provide the same benefits as a single currency.
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This follows ECOWAS postponing the launch of the single currency in 2021 to 2027 due to the outbreak of the COVID-19 virus. The single currency is expected to boost economic growth within the bloc and improve cross-border trade.
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But Ofori-Atta is convinced that the idea of a single currency has become a dream.
Criteria for the implementation of the single currency
ECOWAS countries must meet four criteria for the successful implementation of the single currency policy.
These are a single-digit inflation rate, a fiscal deficit of no more than 4% of GDP, gross external reserves that can cover imports for at least three months, and central bank deficit financing no more than 10% of the previous year. tax revenue.
He said most ECOWAS countries cannot meet the agreed criteria to enable the implementation of the single currency policy.
Ken Ofori-Atta has suggested that ECOWAS must Instead, focus on perfecting cross-border payment systems and removing trade barriers.
He noted that other economic blocs, such as in East Asia, while not achieving a single currency, managed to make their payment systems efficient, thereby increasing trade.
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He hopes that, under Afreximbank’s leadership, a strong payment system can be developed to boost trade and remove trade barriers.
Ofori-Atta further urged ECOWAS to leverage the African Continental Free Trade Area to get rid of trade barriers and pursue trade harmonisation.
Akufo-Addo is concerned about the secession of the Sahelian states from ECOWAS
YEN.com.gh reported that President Akufo-Addo warned that the withdrawal of Mali, Burkina Faso and Niger from the Economic Community of West African States (ECOWAS) would have a dire impact on the Accra Initiative.
The Accra Initiative is a regional security arrangement aimed at preventing the spread of terrorism from the Sahel and tackling transnational organized crime and violent extremism in member countries’ border regions.
Speaking at the High Level African Counter-Terrorism Summit held in Abuja, Nigeria, President Akufo-Addo said the withdrawal of the three Sahelian states would adversely affect cohesion under the Initiative.
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This would lead to an escalation of violent extremism in the region, threatening the relative peace particularly enjoyed by coastal states.
Corrected by Edwina NK Quarcoo, journalist and copy editor at YEN.com.gh.
Source: YEN.com.gh