Ofori-Atta Says ECOWAS Should Focus On Trade Harmonisation Rather Than Single Currency

Ofori-Atta Says ECOWAS Should Focus On Trade Harmonisation Rather Than Single Currency

  • Former Finance Minister Ken Ofori-Atta has advised the ECOWAS to shelve the single currency policy and focus on trade harmonisation
  • He argued that the convergence criteria set for the implementation of the single currency policy has been unattainable for most states
  • He has urged the regional bloc to harness the African Free Trade Agreement to remove trade barriers

Former Minister of Finance Ken Ofori-Atta has urged the Economic Community of West African States to pursue trade harmonisation rather than a single currency.

He explained that the economic bloc’s quest to achieve a single currency has been unattainable for far too long and that energies must be redirected into other avenues that would provide the same benefits as a single currency.

Ofori-Atta Says ECOWAS Should Focus On Trade Harmonisation Rather Than Single Currency
Ken Ofori-Atta has suggested that ECOWAS concentrate on trade harmonisation over a single currency.
Source: Getty Images

This follows the ECOWAS postponing the launch of the single currency in 2021 to 2027 due to the advent of the COVID-19 virus. The single currency is expected to boost economic growth within the bloc and improve interstate trade.

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But Ofori-Atta is convinced the idea of a single currency has become a pipe dream.

Criteria for single currency implementation

ECOWAS countries must meet four criteria for successfully implementing the single currency policy.

These are a single-digit inflation rate, a fiscal deficit of no more than 4% of the GDP, gross external reserves that can cover imports for at least three months and a central bank deficit financing of no more than 10% of the previous year’s tax revenues.

He said most ECOWAS countries cannot meet the agreed criteria to allow the implementation of the single currency policy.

Ken Ofori-Atta has suggested that ECOWAS must instead concentrate on perfecting interstate payment systems and removing trade barriers.

He noted that other economic blocs, like in East Asia, while it did not achieve a single currency, have been able to make their payment systems effective, thus increasing trade.

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He hopes that, under the leadership of the Afreximbank, a robust payment system can be developed to boost trade and remove trade barriers.

Ofori-Atta further urged the ECOWAS to leverage the African Continental Free Trade Area to get rid of trade barriers and pursue trade harmonisation.

Akufo-Addo concerned about Sahelian states breaking away from ECOWAS

YEN.com.gh reported that President Akufo-Addo warned that the withdrawal of Mali, Burkina Faso and Niger from the Economic Community of West African States (ECOWAS) would have a dire impact on the Accra Initiative.

The Accra Initiative is a regional security arrangement aimed at preventing the spillover of terrorism from the Sahel and addressing transnational organised crime and violent extremism in member countries’ border areas.

Speaking at the High-Level African Counter-Terrorism Meeting held in Abuja, Nigeria, President Akufo-Addo said the withdrawal of the three Sahelian states would adversely impact cohesion within the Initiative.

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This would lead to an escalation of violent extremism in the region, threatening the relative peace coastal states, in particular, have been enjoying.

Proofread by Edwina N.K Quarcoo, journalist and copy editor at YEN.com.gh.

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Source: YEN.com.gh

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Cornerlis Affre (CA and Politics Editor) Cornerlis Kweku Affre is at present a Current Affairs Editor at Yen.com. He covers politics, business, and other current affairs. He has worked in various roles in the media space for at least 5 years. You can reach out to him at cornerlis.affre@yen.com.gh