Proposed ECOWAS currency not good for Nigeria —Economists

Economists have described the plan of the Economic Community of West African States to establish a monetary union across West African countries as detrimental to Nigeria’s economy.

They said the plan to use a single currency across Anglophone West African countries by 2015, and the rest of West African sub-region by 2020 was not feasible.

According to them, it is not practicable to meet the conditions necessary for such economic union within the time frame.

The Chief Executive Officer of the Economic Associates and member of the National Economic Intelligence Committee, Ayo Teriba, said that the union, if it ever comes to fruition, would be a burden on Nigeria, considering that her economy constitutes about half of the economy of West Africa.

“ECOWAS has been talking about this monetary union for about 15 years now. They set dates, shifted it and they have not been able to achieve it. The problem is that the reforms needed for such a union have not been done.

“There are still barriers to the movement of goods and services; duties are still being paid on goods moving from one West African country to another. There are still barriers on the movement of labour; you cannot just migrate to a neighbouring West African country and get a job easily. There is also no single financial system; a bank in Nigeria cannot do business in another West African country. You have to take these steps before talking about a single currency,” he said.

Teriba added that Europe should be studied properly on the steps it took on the Euro.

“Europe took those steps before deciding on Euro. However, the challenges that Europe is facing now, shows that those steps are not even enough. I don’t see how ECOWAS would be able to achieve a single currency. I very much doubt its feasibility and I don’t see how that would benefit Nigeria.

“The rest of ECOWAS offers Nigeria less than what Nigeria offers them. None of them is bringing something to the union. They would just merge and still be dependent on imports from Europe. So I think Nigeria is better off on its own than joining such a union.”

Similarly, a Senior Lecturer, Department of Economics, Ahmadu Bello University, Zaria, Dr. Usman Muttaka, told our correspondent on the phone that it would be very difficult to achieve a single currency in West Africa, considering other economic affiliations, such as the place of Francophone West African countries.

Muttaka noted that the Francophone West African countries have one central bank, which directly relates with the Central Bank of France, and therefore, it would be difficult to get them to join the proposed union.

He noted that Customs Union, which meant that all West African countries would charge the same customs duties, was meant to start in 2010, but it failed.

“I don’t know how that would be feasible, because it would mean having the same macroeconomic policies and similar fiscal policies. And I think it would affect Nigeria’s economy adversely because these other West African countries are non-productive and they would be depending on Nigeria, which is the biggest economy in the sub-region,” Muttaka said.

Culled from the Punch.....