Ghana's vice president Kwesi Amissah-Arthur has been quoted as saying that West Africa is likely to face challenges greater than those experienced by the Euro Zone in its quest to operate a single currency without social, economic and political integration.
We share the view that West African countries must give up a degree of their sovereignty and converge politically so as to avoid potential problems, after the launch of the West Africa Monetary Zone come January 2015.
The introduction of the ECO and launch of WAMZ would be feasible if all macro-economic convergence criteria were met, adding that the process must also include the completion of the harmonization of all fiscal, financial and monetary policies, he also stated.
He added that rushing into an unsustainable monetary integration that has the potential of deepening the macro-economic woes of the member states of the Economic Community of West African States (ECOWAS) would be disastrous.
The establishment of the West African Common Currency (the ECO) was delayed from January 2003 to December 2005, then to December 2009 and now January 2015.
'Monetary is not just a matter of economics. It is political in the sense that it involves fiscal discipline, trade policies, investment decisions and even security considerations,' he said.
He said the Euro Zone crisis has huge implications for the WAMZ since the envisaged closer economic integration in the sub-region was seen as an important strategy to expand markets and the trading of goods between member states.
The ECO, when introduced, will enhance intra-regional trade by eliminating exchange rate volatility, reducing transaction costs and facilitating capital flows within the sub-region.
The vice president pointed out that fiscal and monetary policies were not enough to ensure
sustainability against the weak co-ordination of economic policies, hence the formation of the West African Monetary Union to correct the imbalances in individual national economic strengths of WAMZ countries.
Nigeria, prior to rebasing its Gross Domestic Product (GDP), constituted two thirds of the total GDP of WAMZ, Amissah-Arthur said.
Source for our guest commentary - Daily Guide
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