WEST AFRICA: ECOWAS Single Currency: Prospect For Regional Economic Prosperity
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In its determination to actualise the long standing dream of a Single Currency for the West Africa Sub Region, ECOWAS Parliament recently held a seminar in Dakar, Senegal. OMONU NELSON examines the challenges, prospects and sustainability.
The strides by the Economic Community of West African States (ECOWAS) through its parliament to float a common currency, like its eurozone counterpart took a giant leap recently with the announcement of 2020, as its takeoff year.
The quest for a common currency, analysts say, is a deliberate attempt at, among other things; reducing trade barriers and enhancing the prospect of an all-inclusive economic development among the countries of the West African sub regional bloc.
The single currency idea was mooted in early 2000s and was first planned to be introduced in 2003, but was postponed several times, to 2005, 2010, 2014 and now 2020.
For the project to be implemented, ten convergence criteria, set out by the West African Monetary Institute (WAMI), must be met, including a single a digit inflation rate at the end of each year, a fiscal deficit of no more than 4 percent of the GDP, a central bank deficit-financing of not more than 10 percent of the previous year’s tax revenues and a gross external reserves that can give import cover for a minimum of three months.
To surmount these hurdles, ECOWAS Parliament, recently held a three-day seminar on the Challenges and prospects of the ECOWAS Single Currency, in Dakar, Senegal. Speaking at the seminar, the Speaker of the ECOWAS Parliament Moustapha Cisse Lo said that, the people of ECOWAS have a fervent desire to have a single currency to facilitate trade and promote integrated economic development.
According to Cisse Lo, the Single Currency will make it possible to lift the commercial and monetary barriers, lower the cost of transaction and spark up economic activities in the region.
All of us are responsible in terms of politics to achieve that objective; we have to be careful to act now, he noted.
He reiterated that, recommendations from the forum will be forwarded to the highest authority of ECOWAS through the President of the ECOWAS Commission.
I urge you, once again, to continue in your respective parliaments to advocate for the adoption of this currency that will strengthen our political, economic and cultural development, explaining that representatives of the people of member states, the ECOWAS parliament needs to complement the efforts of the ECOWAS commission in the implementation and monitoring of the roadmap of the ECOWAS single currency programme.”
The speaker said the ECOWAS Parliament particularly needs to facilitate sensitisation and information on the single currency programme and contribute to improving understanding of the process by the public and private sectors as well as civil society operators and encourage them to take ownership of it.
Parliament also needs to complement the effort of the ECOWAS Commission to ensure effective monitoring of the implementation of the single currency and interface with member states to ratify the implement protocols and decisions relating to the single currency, Cisse Lo added.
n a unanimous declaration adopted by the forum, the ECOWAS Parliament said, it welcomed the political commitment of the Authority of Heads of State and governments to establish the ECOWAS single currency.
It said it also welcomed the gradual approach in favour of starting with countries that have fulfilled the convergence criteria and the progress made by member states and encourages them to continue in their efforts toward the fulfillment of the convergence criteria and strengthening of the multilateral surveillance mechanism.
The ECOWAS Parliament also requests the Authority of Heads of State and government to take a firm stand regarding compliance with the 2020 deadline for the establishment of the ECOWAS single currency.
According to the forum, to ensure the sustainability of the ECOWAS single currency, it is key to continue efforts to harmonise monetary and budgetary policies. This requires the strengthening of the multilateral surveillance mechanism through greater involvement of Central Banks and Finance Ministries.
It recommended that member states continue and expedite budget consolidation efforts through tax revenue mobilisation and the improvement of the quality of public expenses: ensure continued sustainability of public debt through the adoption of appropriate debt strategies. Persevere in ongoing reforms in the structural transformation of economies, promote regional integration through the free movement of factors of production, create a permanent integration framework among the ECOWAS commission, WAMA, WAMI and the ECOWAS parliament, put in place a communication mechanism to reach the greater proportion of the people through national parliaments and civil society organisations.”
Also speaking on the way forward for the achievement of the initiative ECOWAS Commission President Jean- Claude Kassi Brou called for the elimination of formal and informal barriers to trade. He also emphasised the rapid development of infrastructure to facilitate trade in order to achieve single currency in the year 2020.
In a quest to ensure the success of the process of the creation of the ECOWAS Single Currency in a timely manner, Kassi Brou made the following recommendations: ensure free movement of labor and capital within the region, including thorough flexible wages and the banking system; increase Intra-regional trade, including the elimination of formal and informal barriers to trade and developing infrastructure to facilitate trade; continue to pursue vigorously the reforms by Member States in the areas of monetary and fiscal policies management for the credibility of the future Single Currency.
Kassi Brou also disclosed that ECOWAS has put in place a road map of specific activities in achieving the single currency. According to him, “ECOWAS have insisted that the work has to be done with the professionals, that means the Central Bank. “
Currency is a matter of the Central Bank, as such in the committee that works at a technical level, at a management level before it reaches the head of State, the Central Bank plays a key role.
“So we have been working, we are working very hard, we are very critical in key decisions that we need to take. Work is ongoing, so we have to thrust all the team map and the road map will be followed, thats what I can say.”
Brou however gave some of the challenges to be the need to make policy reforms because to achieve single currency we have some criteria, very important criteria, for example the budget deficit in relation to GDP must be less than 3 per cent, and countries must make effort to achieve that.
“The second criteria, inflation rate should be less than ten percent, so countries need to work to achieve that.
“Other criteria which say the financing of the deficit from Central Bank should not be more than ten percent; countries need to work to achieve that.”
Other criteria he mentioned are that the foreign exchange reserve need to be at least at a level of three months of import.
In retrospect, the ECOWAS Parliament, also known as the Community Parliament, is a forum for dialogue, consultation and consensus for representatives of the people of West Africa, with the aim of promoting integration. It was established under Article 6 and 13 of the ECOWAS Revised Treaty of 1993.
The Protocol relating to the Parliament was signed in Abuja on 6th August, 1994 and entered into force in 14th March, 2002. It provides for the structure, composition, competence and other matters relating to the Parliament.
The Plenary is the highest body of the Parliament and its decisions are binding on other structures. As an advisory Parliament, the Plenary adopts all Resolutions of Parliament which are to be forwarded to the decision making bodies of the Community.
The Bureau is the governing organ of the Parliament. The Bureau consists of the Speaker and all the Deputy Speakers of the Parliament. They determine the draft agenda and all programmes or business of Sessions amongst various other functions.
The Conference of Bureaux consists of The Speaker, Chairmen or Deputy Chairmen and the Rapporteur of each of the Standing Committees. They work with the Bureau of the Parliament to prepare the draft annual work-plan taking into account the priority Community programs amongst other functions. They also work in close collaboration with National and other Regional Parliaments.
At its 25th session held in Dakar, Senegal on the 21st and 22nd December, 2001 the Authority of Heads of State and Government decided that Abuja should be the headquarters of the Parliament.
The Parliament is composed of 115 seats. Each of the 15 Members states has a guaranteed minimum of five seats. The remaining seats are shared on the basis of population. Consequently, Nigeria has 35 seats, Ghana eight (8) seats, Cote d’Ivoire seven (7) seats, while Burkina Faso, Guinea, Mali, Niger and Senegal have six (6) seats each.
The others Benin, Cape Verde, The Gambia, Guinea Bissau, Liberia, Sierra Leone and Togo have 5 seats each.
The Parliament is empowered to consider issues concerning human rights and fundamental freedoms of citizens; interconnection of energy networks; interconnection of communication links between Member States; interconnection of telecommunications systems; increased cooperation in the area of radio, television and other intra and inter-Community media links; as well as development of national communication systems.
The Parliament may also be consulted on matters relating to public health policies for the Community; common educational policy through harmonisation of existing systems and specialisation of existing universities; adjustment of education within the Community to international standards; youth and sports; scientific and technological research; and Community policy on environment.
Other areas for consideration include any issues affecting the Community, especially as they relate to the review of the ECOWAS Treaty, citizenship and social integration. On these issues, the Parliament may make recommendations to the appropriate institutions and/or organs of the Community.
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