Home | Goldstreet Business
Friday, August 12, 2022
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
Gold Business Logo
No Result
View All Result

Fading prospects for a West African single currency

September 7, 2018
in Uncategorized
0
Share on FacebookShare on Twitter

Nearly two decades after anglophone West Africa unveiled a road map to establish a single currency the prospects are still dim despite political will in Ghana.

To most economists who believe that regionalism can unlock Africa’s huge under-exploited economic potential, a partnership between Ghana and Nigeria holds the key for the western part of the continent. Between them, the two largest economies in West Africa account for about 68% of the sub region’s Gross Domestic Product even as it is finally striving to turn its 40 year vision of economic integration into concrete reality after spending decades sitting on its hands in this respect.

However, Nigeria is proving to be far less enthusiastic about regional economic integration than Ghana is and this is threatening to be a major set back for the former which wants unfettered access to the regional market in order to attract larger investments in productive capacity than what its own  less than 30 million strong consumer market can sustain. Instructively Nigeria, Africa’s largest economy is one of the very few countries that has bluntly refused to sign up to the African free trade area now being established and which secretariat Ghana enthusiastically wishes to host in Accra. In response, President Nana Akuffo-Addo has devoted considerable time and effort to try and persuade Nigeria to sign up.

RELATED POSTS

Ghana doubles IMF funding goal to US$3 billion in three years

Gold bounces above $1 800 after US Inflation Data

But this is just the latest regional initiative that Nigeria is reticent about being a part of, making official statements showing commitment but failing to back up its rheotic with policy action. Which is why Ghana’s government is now turning back to an earlier major economic integration initiative that is still lacking Nigeria’s crucial backing in actual practice.

This is the Eco, a single currency that is to be used by all the English speaking countries in West Africa – Ghana, Nigeria, Sierra Leone,             Liberia and The Gambia – as well as Guinea, the only French speaking country in the sub region which is not part of the CFA franc currency zone. When – or rather if – it starts up it will actualize West Africa’s Second Monetary Zone [christened WAMZ   for short]  leaving the sub region with just two currencies and thus paving the way for an evntual merger of the two to create a long craved for single West African currency.

However, so far, little has gone according to plan. Unlike with the CFA Franc, which is supported by the French treasury and therefore pegged to the Euro, the Eco would have to get by on the strength of the economies of the respective member nations. This has required stringent primary and secondary convergence criteria , the key ones being single digit inflation, a fiscal deficit of not more than 4% annually, a limit on central bank financing of national fiscal deficits and gross international reserves of not less than three months import cover.

However, none of the aspiring member states have been able to sustain adherence to those criteria, over the past decade, thus forcing one postponement of the take off date after another. Currently the idea is that if more than one country has met the criteria by 2020, then they can start and the others will join as they too meet the convergence criteria. But even this will be a challenge; few countries if any can expect to fufill all the criteria within the next two years.

Worse still, interest has waned considerably since those heady days when the single currency initiative was first unveiled, especially in Nigeria, where the benefits of joining it are now being openly questioned by both public officials and private business people.

“How do you ensure that it does not look like unfair imposition especially when Nigeria’s economy is so much bigger than theirs?” asks Michael Adedotun, responding to an online survey conducted by This Day Online. “That will cause serious bad blood.”

Adedotun ‘s sentiments are echoed across   Nigeria. “Nigeria dos not really need the echo; what it truly needs presently is to keep its house in order: Lagos resident Patience Eneyeme said in the same survey.

“The idea of of a single currency in West Africa, though appealing, may not benefit Nigeria in the long run because of the intensified issues of corruption  and cross-border capital flight across member nations, Abuja resident Iheanyi Chukwudi said. He added that “an Eco may encourage looting and this would be counterproductive to development.

The Gambia in particular has been skeptical  right from the start.

In contrast though, Ghana now sees its future in the eco. “The 350 million market is important to us for our industrialization drive” insists Ken Ofori-Atta, the country’s finance minister. “I think that if Ghana positions itself well we will be a great beneficiary. Economic activity in the ECOWAS region is improving and most of the large economies are experiencing economic rebound.”

President Akuffo-Addo himself appears even more enthusiastic than his finance minister. “We remain determined to have a single currency which would help remove trade and monetary barriers, reduce transaction costs boost economic activities and raise the living standards of our people “ he insists.

Despite the political will in Accra though. the economic challenges posed to the initiative to establish a second sub regional currency are increasing. The crash in oil prices since 2014 have revealed how volatile             Nigeria’s macroeconomic performance can be due to the inordinate dependence it has on oil revenues. The oil price crash, combined with weak global market prices for both gold and cocoa has weakened then cedi significantly too. Now, the end of monetary easing in The United  States has had dire consequences too, for West African countries that have opened up their domestic debt markets to foreign portfolio investors.  They are now faced with the proposition of raising domestic interest  rates in order to make local currency denominated securities more competitive against US dollar denominated securities.

All this has exposed the fundamental volatilities of the domestic currencies of the aspiring members of the eco currency zone and will make the meeting of the primary convergence  targets all the more difficult to achieve. Thus , even as the political rheotic remains encouragingly positive, the underlying economics have take the little shine already achieved off the proposed eco.

facebookShare on Facebook
TwitterTweet
ShareTweetShare

Related Posts

Global gold market trends favour Agyapa Royalty

Ghana doubles IMF funding goal to US$3 billion in three years

August 11, 2022
Gold bounces above $1 800 after US Inflation Data

Gold bounces above $1 800 after US Inflation Data

August 11, 2022
President inspects ‘Agenda 111’ project at Kpandai

President inspects ‘Agenda 111’ project at Kpandai

August 11, 2022
Central Banks Hike Interest Rates in Sync to Tame Inflation Pressures

Central Banks Hike Interest Rates in Sync to Tame Inflation Pressures

August 10, 2022
Ghana’s economic outlook to remain negative until fiscal economy improves – Fitch

Fitch downgrades Ghana to ‘CCC’ days after poor S&P grading

August 11, 2022
Next Post

UNAIDS and StarTimes to increase HIV/AIDS awareness among African young people with mobile application

Pay depositors’ cash before winding up – BoG to operators

Archives

<
August 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
▼
>
MonTueWedThuFriSatSun
1234567
891011121314
15161718192021
22232425262728
293031    
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
 123456
78910111213
14151617181920
21222324252627
28      
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
1234567
891011121314
15161718192021
22232425262728
       
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
     12
3456789
10111213141516
17181920212223
242526272829 
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
    123
45678910
11121314151617
18192021222324
25262728   
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       

RECOMMENDED

Global gold market trends favour Agyapa Royalty

Ghana doubles IMF funding goal to US$3 billion in three years

August 11, 2022
Gold bounces above $1 800 after US Inflation Data

Gold bounces above $1 800 after US Inflation Data

August 11, 2022

MOST VIEWED

Plugin Install : Popular Post Widget need JNews - View Counter to be installed
  • Energy
  • Health
  • Auto
  • International
  • Subscription Form
  • Staff Webmail
  • About Us
  • Contact Us
Call us: +233 24 432 0902 | info@goldstreetbusiness.com

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

No Result
View All Result
  • Homepages
    • Homepage Layout 1
    • Homepage Layout 2
  • World
  • Business
  • Technology
  • Health

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.