By Victoria Ojeme

THE President of ECOWAS Commission, Jean-Claude Kassi Brou, yesterday, called for increase in intra-regional trade, including the elimination of formal and informal barriers to trade and development of infrastructure to facilitate trade towards achieving single currency in 2020.

ECOWAS Parliament

Brou, who made the call at a seminar on the ECOWAS single currency in Dakar, Senegal, disclosed that countries that met the criteria will commence the process.

He added that in the quest to ensure the success of ECOWAS single currency in a timely manner, the following recommendations will be made:

To ensure free movement of labor and capital within the region, including flexible wages and the banking system; increase intra-regional trade, including the elimination of formal and informal barriers to trade and development of infrastructure to facilitate trade, and to continue to pursue reforms at the level of the member states in the areas of monetary and fiscal policies management for the credibility of the future single currency.

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ECOWAS also recommended diversification of economies of the region to reduce impact of external shock.

Brou also disclosed that ECOWAS had put a road map of specific activities to achieve the single currency.

He said: “ECOWAS has insisted that the work has to be done with professionals, that is the Central Banks.

“Currency is a matter of Central Bank, so in the committee that works at a technical level at a management level before it reaches the Head of State, Central Bank plays key role.

“So we have been working, we are working very hard, we are very critical in key decisions that we need to take, so work is ongoing.’’

Brou, who listed some of the challenges, said further: “We need to make policy reforms because to achieve single currency, we have some criteria, very important criteria. For example, the budget deficit in relation to GDP must be less than three percent, countries must make effort to achieve that.

“The second criterion, inflation rate, should be less than ten percent, so countries need to work to achieve that.

“Other, criteria which say the financing of the deficit from central bank should not be more than ten percent; countries need to work to achieve that.

‘’One of the criteria again says that foreign exchange reserve needs to be at least at a level of three months of import.

‘’So, those are key criteria and objective parameters to follow the road map to single currency, so countries are working together,’’ he said.

In his remarks, Commissioner for Macroeconomic Policy and Economic Research of the ECOWAS Commission, said there were several reasons for the creation of a monetary union within ECOWAS.

He explained that ECOWAS single currency was a statutory obligation, quoting to Article 55 of the 1993 Revised ECOWAS Treaty which states that “member states undertake to complete within five years of an Economic and Monetary Union”.

He added that the coexistence of eight non-convertible currencies within ECOWAS does not promote the development of intra-regional trade, which is still low.

In spite of the implementation of the ECOWAS Trade Liberalization Scheme and Common External Tariff , the average intra -ECOWAS trade between 2013 and 2017 was 11.3 percent of total trade, including 12.2 percent for intra-community exports and 10.7 percent for imports”.