Kalilou Traore, the ECOWAS commissioner for industry and private sector promotion, has said that the commission is committed to implementing a single currency in West Africa by 2020.
The commissioner said that several political and technical implications will have to be considered before the implementation date of 2020.
“More states have to comply with some macroeconomic criteria like inflation, budget deficit, currency stability; without this, if we set up a common currency, it will fail.”
He said that through the common currency, the commission hopes to support the regional economy by making it more integrated with a stronger trade exchange among member states.
The institute set out four primary convergence criteria and six secondary convergence criteria to achieve the creation of the new currency.
The primary criteria are a single-digit inflation rate at the end of each year and a fiscal deficit of no more than four per cent of the gross domestic product among member states.
Others are central bank deficit-financing of no more than 10% of the previous year’s tax revenue and gross external reserves that guarantee import cover for a minimum of three months.
The West Africa CFA Franc is already in use in eight countries, and the Central African CFA Franc is used by six countries.
The Nigerian Naira gained N0.03 today to close at N196.97 at the official interbank window. However, it may drop due to the record-low oil prices ($37.51 per barrel at the time of publishing the present report) that hit 2009 lows.
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