By Edrissa Jallow
Principal Programme Officer of the Economic Community of West African State (ECOWAS) Iliyasu M. Bobbo, has confirmed to Gainako in an interview that out of the fifteen ECOWAS member states only one country was able to meet the primary criteria for the regional currency, ECO.
Mr Bobbo who was in town this week for a four-day seminar on the current economic situations and forecast noted that “all member states agreed” on six primary criteria that can lead to the adoption of the single currency. However, all fail excluding Togo making it the only country to break the record.
According to Mr Bobbo, Togo is the only country that met the criteria consistently following the implementation period from 2015 to 2020. “Is only Togo that was able to meet the primary criteria consistently for three years all other countries failed. So, it becomes practically impossible to start the single currency” ECOWAS Principal Programme Officer told Gainako.
The single currency named “ECO” aims to boost the integration of ECOWAS countries. In June 2021, ECOWAS Heads of State and Government officials converged in Accra, Ghana, holding its ordinary session where they adopted a new convergence and macroeconomic stability in ensuring the ECO currency is adopted for use by 2027 according to a publication by Togo first.
The report states that “in line with the pact, ECOWAS States are to meet related convergence criteria between 2022 and 2026”.
The President of the ECOWAS Commission, Jean Claude Kassi Brou said at the end of the ordinary session that the commission has “a new roadmap and a new pact that will cover the period between 2022-2026, and 2027 being the launch of the ECO”.
Below are the six primary convergence criteria agreed upon and its definition among the ECOWAS countries.
- “First is the budget deficit, they [member states] have to ensure that the budget deficit is not more than three per cent.
- The second is inflation they [Member States] have to ensure that inflation is not more than five per cent.
- The third is an external reserve. They [member states] have to be sure that they accumulate enough external reserve that will last them import for almost six months.
- Finally is that they [member states] agreed that the central banks should not finance the budget deficit of member states,” Mr Bobbo explained.
He further highlighted that the remaining two criteria are secondary criteria which noted that “the debt of member state should not be more than 70 per cent of the GDP and the exchange rate variation should not be more than ten per cent or less than ten per cent”.