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Why single currency won’t work now in W/Africa—LCCI

Apart from the fact that President Muhammadu Buhari on Tuesday in Niamey, Republic of Niger, urged member countries of the Economic Community of West African States (ECOWAS) to hold on further action on pushing for a single currency for the sub-region till 2020, Director General of the Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, has given fresh reasons why the deal cannot fly now.

In an exclusive interview in Lagos on Thursday, he cited provisions of the ECOWAS treaty which made it clear that for single currency regime to be in place, all member states must be on an economic regime of single digit inflation rate.

Currently, the lowest inflation rate of a member nation is 12.7 while Nigeria is around 15.8 per cent.

Besides, Yusuf averred that there is still need to further develop inter-modal transport system especially in air, land and sea including railways which are yet to be in place in the sub-region.

According to him, going forward with the deal will only ruin recovering economies in the region and plunge growing ones into monetary and fiscal policies crisis.

In his argument in Niamey, President Buhari cited the current challenges faced by the European Union in realising the same goal to buttress his position.

In a statement by his Special Adviser on Media and Publicity, Mr. Femi Adesina, the President made his position known in his speech at the fourth meeting of the Presidential Task Force on the ECOWAS Currency Programme.

Buhari said the necessary economic fundamentals among countries continued to differ over the years, making it more difficult to pull through with the project by 2020.

He noted that “Nigeria advises that we proceed cautiously with the integration agenda, taking into consideration the above concerns and the lessons currently unfolding in the European Union”.

He said, “Although the ECOWAS Commission has anchored its pursuit of the new impetus to monetary integration on the information presented to the heads of state, which were the basis for their recommendations, we are concerned that we have not properly articulated and analysed a comprehensive picture of the state of preparedness of individual countries for monetary integration in ECOWAS by 2020.

“In previous meetings, we had specifically raised observations on the state of preparedness of the member states, the credibility of the union if anchored on watered down criteria, and the continuing disparities between macroeconomic conditions in ECOWAS countries, amongst others. And I would like to reiterate this concern.”

“Nigeria had earlier withdrawn from the process because its key questions and concerns were ignored and till date, none of the issues has come up as an agenda issue to be considered by the taskforce.

“To that end, Nigeria will caution against any position that pushes for a fast-track approach to a monetary union, while neglecting fundamentals and other pertinent issues,” the President was quoted as saying.

President Buhari linked his position to observed diverse and uncertain macro-economic fundamentals of many countries; unrealistic inflation targeting based on flexible exchange rate regime; and inconsistency with the African Monetary Cooperation Programme.

He also noted that critical domestic issues in ECOWAS member countries relating to their constitutions and dependence on aids had continued to affect the framework for implementing the single currency in the sub-region