Mr Ken Ofori-Atta, the Minister of Finance, has observed that, public debt and fiscal deficit remain major challenges hindering the Economic Community of West African States (ECOWAS) to meet the convergence criteria of a single currency.
In that regard, he said, there was the need for enhanced efforts and strong regulatory framework by the member countries to arrest fiscal slippages in order to improve the collective achievement of the convergence criteria on sustainable basis.
“We need to apply a menu of appropriate policy options supported by structural reforms to support our economic programmes,” he said.
Addressing key stakeholders at the Second Meeting of the ECOWAS Ministerial Committee of the Presidential Taskforce on the ECOWAS Single Currency in Accra, on Monday, Mr Ofori-Atta, who is the Chairperson of the Ministerial Committee, said the implementation of the activities of the Roadmap required financial, human and material resources to execute the final roadmap.
The Finance Minister said the journey to the successful establishment of ECOWAS single currency by 2020 required commitment and unwavering political support from all stakeholders and member countries.
The key convergence criteria needed to achieve the goal of a common ECOWAS currency include; strong and unwavering political support and regional integration efforts that required political and economic projects, fiscal discipline, combined with fiscal transparency and a regional independent Central Bank.
The need for robust regional institutions to enforce the common rules, strong banking supervision to safeguard the stability of the financial sector and formal division of powers between national and regional institutions as well as establishment of regional surveillance mechanisms.
The meeting was part of the process of implementing the recommendations of the Niamey Meeting of the Presidential Taskforce held in October 2017, which instructed the Ministerial Committee to meet within three months to adopt a new road roadmap for accelerating the process of creating the ECOWAS single currency.
It was also to present and consider the conclusions of the Sixth Meeting of the Preparatory Technical Committee of the Presidential Taskforce on the ECOWAS Single Currency Programme as well as review and validate the Draft Roadmap.
The Finance Minister said the economies of the Sub-region had been burdened with both exogenous and endogenous shocks that hinder the achievement of the convergence criteria.
He urged the stakeholders to take a critical look at the new roadmap, examine the activities and associated costs as well as the timelines for their feasibility and make sure appropriate recommendations were made to the Presidential Taskforce for reconsideration.
“The journey to the successful establishment of the monetary union needs each stakeholder to stay committed. And we, as a Committee, need to ensure that the outcome of our deliberations guide the Taskforce towards the establishment of the regional monetary union within the agreed deadlines,” Mr Ofori-Atta said.
Mr Ofori-Atta noted that, the economic activities in the ECOWAS region was improving, noting that, most of the large economies were experiencing a rebound.
According to the 2017 half year Economic and Monetary Corporation Programme, economic activities in ECOWAS was estimated to accelerate at 2.1 per cent in 2017 from 0.1 per cent in the preceding year.
The West African Economic and Monetary Union (UEMOA) and WAMZ were projected at 6.8 and 1.4 per cent compared to 6.6 per cent and 0.9 per cent recorded in the previous year, while inflationary pressures had also moderated in the region.
Touching on macro-economic progress recorded under President Akufo-Addo’s led government, Mr Ofori-Atta said, the macro-economy had witnessed a turnaround, with the economy stabilising, while the economic growth had experienced a rebound.
He said the fiscal deficit had reduced from 9.3 per cent of the Gross Domestic Product (GDP) at the end of 2016 to 5. 9 per cent at the end of 2017 fiscal year.
He said the real GDP growth for the first three quarters of 2017 averaged 8. 3 per cent against a growth target of 6.3 per cent.
Mr Ofori-Atta said: “We have equally made significant gains in reducing inflation, interest rate, debt accumulation, and stabilising the exchange rate and accumulated comfortable level of reserves at the end of 2017”.
He noted that, the gains had been made possible by the prudent management of the economy and the implementation of inclusive and broad-based policy initiatives such as the One District, One Factory, Planting for Food and Jobs, National Digital Addressing System, National Identification System, and the Akufo-Addo’s Plan for Economic Transformation.
Mr Marcel A De Souza, the President of the ECOWAS Commission, in his welcome address, said in view of the difficulties ECOWAS nations were facing in meeting the convergence criteria, it had decided that, four or five member countries that would meet the criteria would start implementing the single currency in 2020.
He said those countries were supposed to achieve three per cent budget deficit by December 31, 2019, three months import reserves and between five and 10 per cent inflation rate.
Mr Souza noted that, the ECOWAS countries needed US$4.4 million dollars outstanding funds to support the implementation of the single currency Roadmap and that member countries were supposed to contribute towards its realisation.
He said the West African Monetary Agency would promote activities and strategies geared towards achieving the 2020 target.
The meeting brought together high profile personalities in the Sub-region, including Ministers of Finance of Cote d’Ivoire, Niger and Nigeria, President of the ECOWAS Commission, President of UEMOA Commission, Governors of Central Banks of ECOWAS, Director-General of the West African Monetary Agency, Director-General of the West African Monetary Institute, Chairman of the Technical Preparatory Committee of ECOWAS, among others.