The regional common currency should be shelved for now
At a recent meeting in Niamey, Republic of Niger, President Muhammadu Buhari urged member countries of the Economic Community of West African States (ECOWAS) to tread carefully in pushing for a single currency in the sub-region by 2020. He cited the challenges faced by the European Union in realising the same goal to buttress his position at the fourth meeting of the presidential task force on the ECOWAS currency programme.
However, despite that realistic assessment, the communiqué "urged member states to take the necessary measures, including the attainment of the convergence criteria, necessary for the creation of the ECOWAS single currency by 2020". It noted further that the taskforce had "instructed the Ministerial committee to meetwithin three months to propose a new roadmap to accelerate the creation of the single currency by 2020. In this framework, a gradual approach can be undertaken, where a few countries, which are ready, can start the monetary union, whilst the other countries join later."
Not only has ECOWAS been talking about this monetary union for almost 25 years now, it has set and shifted dates for a realisation of this objective over and over again. But it is nothing but an organised waste of time. The regional solidarity needed for the next steps is missing; the reforms that should precede such a union have not been carried out and there is overwhelming evidence of limited consensus on key issues and resolutions that had to be made at extra-ordinary meetings where a full house would indicate genuine commitment. It is therefore important that ECOWAS does not deceive itself into mistaking the regular consultations with limited impact on the far-reaching policy decisions of its members for any meaningful progress.
We must state clearly that we hold no objection to the idea behind a common currency for West Africa. A major benefit of this idea, according to its proponents, is that with an estimated population of about 250 million people spread over 15 member-countries, a unified monetary system will provide an enormous market for the development of the sub-region. Innovative and forward looking as that may seem, it is our view that the implementation will take much more commitment in an environment that is still caught up in atavistic colonial cleavages.
Apart from the huge capital outlay for the realisation of such ambitious agenda which is not there, the timeline for monetary union seems to fly in the face of contemporary global realities. Against the background that Europe took several steps before deciding on Euro, how will a regional economy that is not denominated in any currency suddenly come up with a binding monetary union?
What this plan presumes is a degree of economic sanity and progressive integration of extant national interests that are nowhere near what is needed to create a common currency. Yet, as we have repeatedly canvassed on this page, West African leaders should face the common challenge of poverty before thinking of a common currency that is no more than mere pipe dream. Development and regional integration are, first and foremost, about the nurturing and use of human capital to create a hub of capacities.
We must also remind West African leaders that it was this recourse to hasty and ill-digested decision making which led to the introduction of ECOWAS Travellers Cheque some years ago with the result that it could not survive beyond one year. Therefore, while the ECOWAS regional currency plan may not be a bad idea in terms of its perceived linkages with the commission's broader goals of regional integration, it is best shelved for now. Working towards the creation of a common currency in West Africa by 2020 is an exercise in futility.