Deputy Minister for Trade and Industry; Carlos Kingsley Ahenkorah is warning about the adoption of the West African proposed currency Eco in Ghana without other member countries enforcing the regime.
The Member of Parliament of Tema West constituency feared if Ghana adopted the currency and used it but others display protectionist tendencies “they will bring us down.”
The adoption of the Eco as the regional currency has been postponed five times with the current enrollment year set for 2020. The Eco was first planned to be introduced in 2003, but this was postponed several times to 2005, 2010 and 2014.
For the Eco to be implemented, ten convergence criteria, set out by the West African Monetary Institute (WAMI), must be met. These criteria are divided into four primary and six secondary criteria. Up to the fiscal year 2011, only Ghana has been able to meet all the primary criteria in any single fiscal year.
The four primary criteria to be achieved by each member country are:
A single-digit inflation rate at the end of each year
A fiscal deficit of no more than 4% of the GDP
A central bank deficit-financing of no more than 10% of the previous year’s tax revenues
Gross external reserves that can give import cover for a minimum of three months
The six secondary criteria to be achieved by each member country are:
Prohibition of new domestic default payments and liquidation of existing ones
Tax revenue should be equal to or greater than 20 percent of the GDP
Wage bill to tax revenue equal to or less than 35 percent
Public investment to tax revenue equal to or greater than 20 percent
A stable real exchange rate
A positive real interest rate
Ghana, The Gambia, Guinea-Conakry (which is French speaking but does not use the CFA franc), Liberia, Nigeria and Sierra Leone are the countries to use the Eco with others in ECOWAS coming on-board.
By Michael Eli Dokosi/goldstreetbusiness.com