Fiscal Deficit Hindering ECOWAS Single Currency Attainment

Ken Ofori-Atta, the Minister of Finance says 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, 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.