ECOWAS single currency will facilitate free trade - Uwaleke

The President of Capital Market Academics of Nigeria, Prof. Uche Uwaleke, says the ECOWAS single currency, if actualized, will facilitate free trade within the sub-region.

Uwaleke, who is also the Director, Institute of Capital Market at the Nasarawa State University, Keffi, said this in an interview with the News Agency of Nigeria (NAN) on Friday in Abuja.

According to him, it is a no-brainer that a single currency for the ECOWAS will facilitate free movement of goods, integration of capital markets, and economic integration in general.

“It will enhance capital formation and lead to increased volume of trade among member states, expanding job opportunities, and enabling growth and development in the region,” he said.

He said that Nigeria was positioned to reap immense benefits from the single currency initiative as the largest economy in the sub-region.

He, however, cautioned that if the experience of the Eurozone was any guide, there were enormous bottlenecks to be surmounted for the target date of 2027 to be realistic.

“Given her huge population, Nigeria is positioned to benefit most from the free movement of goods and people resulting from the implementation of a single currency.

“Unfortunately, it does seem that the target looks unrealistic.

“ECOWAS appears fragmented with the exit of three of her members. Virtually all member states are far from meeting the primary convergence criteria set by the West African Monetary Institute.

“In the case of Nigeria, the leading economy in the region in terms of Gross Domestic Product (GDP) size, the inflation rate has been double digits for many years.

“The actual budget deficit as a percentage of GDP has been more than four percent, and the CBN's direct financing of fiscal deficits has been in excess of 10 percent,” he said.

According to Uwaleke, it is the same story with several other member states that cannot boast of gross external reserves capable of financing three months’ imports.

“There is equally the fact that France is not supporting the French-speaking member states (UEMOA) to have independent central banks.

“Against this backdrop, the first task for ECOWAS in the direction of a single currency is to unite politically, lure back the three countries that exited into their fold, and then support each other to strengthen their domestic economies.

“Any attempt to inaugurate a single currency without first putting its house in order will witness a still-birth project,” he said.

Supreme News reports that finance ministers and central bank governors from the 15 ECOWAS states recently indicated plans to inaugurate the single currency initiative known as the ECO.

The initiative, which is designed to propel economic growth and development throughout West Africa, received the endorsement of Nigeria.

The single currency is part of the features in the three-in-one identity cards planned by the National Identity Management Commission and set for rollout in August.

A statement issued by the Ministry of Finance emphasised Nigeria’s unwavering commitment to its successful implementation.

The statement said that the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, noted the critical role ECO will play in fostering economic growth and development in the sub-region.