The dream of a single currency by the Economic Community of West African States (ECOWAS) would soon become a reality.
Aichatou Kane, a representative from Niger Republic, revealed this at the ongoing 54th Annual Meeting of the African Development Bank (AfDB) in Malabo, Equatorial Guinea.
“The process is in a fast lane of integration and planned to have its own currency in 2020,” she said.
The decision to create a single monetary zone for West Africa was reached by Heads of State of the 15 member countries at a summit of the ECOWAS in Lome, Togo, in 1999. Sadly, the sub-region is still far from having a common legal tender and what is ordinarily a good idea seems to have fizzled into a fantasy.
However, economic experts have expressed divergent opinion on the workability of a single currency on a continent that is still struggling with several challenges.
Akin Alabi, a Lagos-based economist, said the single currency could help address West Africa’s monetary problems such as the lack of independence of central banks and non-convertibility of some currencies.
According to Alabi, ultimately, a single currency and its associated regional institutions could also boost investor confidence and promote trade within the sub-region. Alabi, however, queried the preparedness of member states to pursue this agenda.
“If we go by the principle of economic integration, I do not see anything wrong with it. Other countries have done it, typically Europe. But it takes a long period of time to achieve. But if we have all it takes, like if our economy is as good as Europe’s, then one can say okay,” he said.
Emeka Odion, senior lecturer in a Lagos-based tertiary institution, in a telephone conversation with BusinessDay, highlighted hurdles that must be overcome if the dream of a single currency could be actualised.
Some of the challenges are the exchange rate and differences in language, because, in West Africa, we have Francophone and Anglophone countries, according to Odion. Again, we have the challenge of the kinds of the economy each country runs and how they will fuse into the single currency regime.
“However, the single currency idea is a good idea. It will be good for somebody who has a factory in Ogun State to target the market in West Africa to sell his or her goods,” he said.
The AfDB and its partners have also inaugurated the Africa Digital Financial Inclusion (ADFI) Facility, designed to aid safety and expansion of digital financial transactions in Africa. The Fund supported by the Bill & Melinda Gates Foundation, the Agence Francaise (AFD) and the Government of Luxembourg as initial contributors.
The goal is to ensure that at least 320 million more Africans, of which nearly 60 percent are women, have access to digital financial services.
The Fund will deploy $100 million in grants and $300 million in the form of debt from the bank’s ordinary capital resources by 2030 to scale up electronic financial services for low-income communities.
Akinwunmi Adesina, president, AfDB, said the intervention would be aligned to four pillars: infrastructure, including digital interoperable payment systems, digital products and innovation, policy and regulatory reform and harmonisation, and capacity building
“We believe that with the right investments in innovation and smart digital growth, the obstacles to achieving financial inclusion and greater economic opportunity for all will be overcome,’’ he said.
