- Warns against common currency rush
BY COBHAM NSA, ABUJA – The Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, has emerged the new chairman of West Africa Monetary Zone (WAMZ) following his election at the ongoing sub-regional meeting in Abuja on Thursday.
This is even as he warned WAMZ member nations against hasty creation of a common currency and common monetary union in the overall interest of sustainable socio-economic development in the sub-region.
Speaking after his election, Mr Emefiele said member countries must work hard towards attaining ECOWAS single currency by year 2020, assuring on hands would be on deck to ensure the actualization of set objectives for the body.
According to him, Nigeria remains committed to the sub-region’s single currency project and all member countries must therefore demonstrate resolve at accomplishing the convergence benchmarks.
He however warned that the yearning for greater economic prosperity for their people through a common monetary union must not debase WAMZ member nations’ awareness of the potential unfavorable and infectivity factors “associated with unified monetary area and common currency.”
The WAMZ boss said it has become imperative to launch a Commission that would effectively drive common interests and aspirations of member countries, adding; “We must intensify our level of cooperation and collaboration through strong bonds to work as a unit within the ECOWAS monetary union programme to achieve our shared objective.”
He further stated that “It has become imperative for us to bring this collective resolve to bear as we embark on a thorough review of the economic conditions of member countries vis-a-vis their levels of preparedness for the monetary union and economic integration of the sub-region.
“The discussion should identify existing or potential impediments to the realization of the deadline for the commencement of the currency union. This is imperative in order for us to jointly find viable options in accelerating progress towards achieving the integration objective.”
In her remarks at the event, Director-General of West African Monetary Institute (WAMI), Dr (Mrs) Ngozi Egbuna, lamented that no member nation was able to meet all the four primary benchmarks as at December, 2017 when an evaluation of their performance took place.
To promote common currency in the sub-region, there are ten convergence benchmarks that are classified into four primary and six secondary criteria.
Among the four primary benchmarks are: Single-digit inflation rate at the end of each year; Central bank deficit-financing of no more than 10 per cent of the previous year’s tax revenues; Fiscal deficit of no more than 4% of the GDP; and Gross external reserves that can give import cover for a minimum of three months.
WAMZ is a six member nation organization comprising Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone.
Between 2016 and 2017, Emefiele also held the post of President, Association of African Central Banks (AACB)