Abuja — Indications emerged yesterday that the adoption of a single currency to be referred to as ECO for West African economies may not commence by December 1, 2009, as four of the five countries in the region were yet to meet the convergence criteria, under the West African Monetary Zone (WAMZ).

As it appears, the launch date may be shifted by the Heads of State in June at their meeting, although the new date is yet to be confirmed.

WAMZ was expected to take off effectively with the ushering in of the ECO by December 1, 2009.

But THISDAY checks revealed that ECO is not likely to be adopted by the due date, implying also that establishment of the proposed West African Central Bank (WACB) may not materialise by the target date, since WAMZ may not be realisable.

The five West Africa countries under the monetary zone are The Gambia, Ghana, Guinea , Nigeria and Sierra Leone, out of which only The Gambia had met all the convergence criteria for the three years running (2006 to 2008).

The WAMZ was formally launched by Heads of State and Government of five countries in December 2000, with the objective of establishing a common central bank and introducing a single currency by 2003, later postponed to 2005 and 2009.

The convergence criteria to be met by December 1, 2009, by all the five countries include, single digit inflation; fiscal deficit/gross domestic product ratio of less than four per cent; central bank financing of deficit of less than 10 per cent and a gross external reserve that could finance not less than three months of imports

A highly placed source told THISDAY yesterday that Nigeria and The Gambia were doing very well, especially since 2006, but because of the global financial crisis, Nigeria missed the criterion target on inflation, the rate of which has shot upto more than single digit, as at 2008.

"Only The Gambia has met all the convergence criteria for three consecutive years but Nigeria slipped in 2008 because inflation went up more than single digit," the source said.

Specifically, the source revealed that for 2008, Nigeria did not meet the inflation rate criterion; Guinea met only two of the four criteria, missing the targets for the foreign reserves and inflation; Ghana did not meet any of the criteria while Sierra Leone failed to meet the targets for fiscal deficit and inflation rate.

Given this scenario, the source said, a meeting of the Convergence Council, which will be convened in about two weeks will decide whether to launch the ECO immediately on December 1, 2009 and allow the West African Monetary Zone to take off. The source added that their decision will then be conveyed to the Heads of State of the countries who will meet in June and decide on the new date for the West African common currency.

"The decision as to whether to take off immediately by December 1, 2009, will be taken in May by the Convergence Council and the Heads of State in June. Whether it will take off, the decision will be taken in June," the source said.

In his presentation titled, "Monetary Unions among Developing and Emerging Markets", Director-General of West Africa Monetary Institute (WAMI) at the ongoing International Conference to mark the 50th Anniversary of the Central Bank of Nigeria (CBN) , Dr. Temitope Oshikoya said, amid the struggle to cope with the spiralling effect of the global economic crisis by countries of the world, the WAMZ and the GCC will soon decide on the merits and timing of a single currency each for their respective countries and regions.