The President of the Federation Muhamadu Buhari has urged ECOWAS member countries to tread carefully in pushing for a single currency in the sub-region by 2020, drawing attention to the challenges faced by the European Union in realising the same goal.
Buhari said in a speech he delivered on Tuesday in Niamey, Niger, at the 4th Meeting of the Presidential Task Force on the ECOWAS Currency Programme, he said the necessary economic fundamentals among countries continue to differ over the years, making it more difficult to pull through with the project by 2020.
He said: “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.”
President Buhari noted that some of the obstacles to realising the roadmap for the implementation of a single currency 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.
The President said 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.
He added: “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.
According to him, “Nigeria had earlier withdrawn from the process because its key questions and concerns were ignored and till date, none of the issues has come up as an agenda issue to be considered by the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.”
Going forward with the project, President Buhari 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 the acceptable time frame, defined cost and funding sources identified.
He further said: “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 harmonised.
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.