The National Association of Nigerian Traders has written to the ECOWAS Heads of State and Government on the adoption of the single currency programme for the subregion.
The association, in a letter signed by its President, Ken Ukaoha, and made available to our correspondent, said for the monetary union to be beneficial to the sub-region, issues of trade barriers and corruption at the borders must be effectively addressed.
The group in the letter said it was of the view that as a people faced with the horrendous acts and infractions that impede trade such as smuggling and border closure; there was a need for countries within the region to come up with practical solutions to tackle the challenges.
The letter reads in part, “We urge ECOWAS member states and relevant authorities to devote more time, resources and political will to the removal of impediments to regional trade while discussions are ongoing for a credible monetary union that is founded on the strong and predictable regional trade.
“This is the only way that the benefits of a monetary union will trickle down to the citizens located even at the lowest ebb of the ladder.
“We further urge member states to equally consider devoting more time to the demanding issues around an implementable and transparent Common External Tariff which is indispensable but has been on the table receiving less attention.
“More so, while taking decisions towards a single currency within the monetary union, the region must be prepared to look far into the future and programme herself with effective currency and trade buffer.”
The idea of the single currency for the West African region was conceived about 30 years ago in the hope of boosting cross-border trade and economic development.
There are three primary and three secondary criteria that a country must achieve to be included in the monetary union.
The primary criteria 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 and a gross reserve that could finance at least three months of imports.
The 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.
So far, only Togo has met all the convergence criteria within the last two years for the monetary union.
Eight West African countries had on December 21, 2019 unilaterally renamed the CFA Franc as eco.
The decision to rename CFA eco by the eight countries was announced by the President of Cote d’Ivoire Alassane Ouattara.
The eight countries are Benin Republic, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo.
The African countries, with the exception of Guinea-Bissau, were French colonies.