The Executive Director of the Policy Initiative for Economic Development has questioned the timing for the issuance of the single currency ECO for the sub-region in 2020.
According to Daniel Amarteye-Anim, although the rationale behind it is a good one, the timing is not ideal.
“If you look at the subregion, most of the dominant economies are not doing too well. Nigeria just recovered from am an economic downturn and is yet to get on a strong footing. Ghana is now going through so many reforms to ensure that we have a strong and resilient economy,” he told Joy Business.
His comments follow reports that ECOWAS heads of state gave their blessing to the introduction of the common currency next year. The decision was reached at a meeting in Abuja Nigeria on Sunday.
There was a roadmap to ensure that all member countries meet three primary criteria for the adoption of the currency.
That includes member countries having a budget deficit of not more than 3%; average annual inflation of less than 10% with a long-term goal of not more than 5% by 2019.
Countries were expected to also have gross reserves that can finance at least three months of imports. The single currency is expected to boost trade in the region and make doing business easier.
However, Amarteye-Anim says most economies in the sub-region are not economically sound to support the use of the currency.
He said once the very dominant economies are not doing too well, it will not be proper to issue a single currency within the timeline given.
“You need the strong economies to serve as the backbone to support the totality of the sub-region,” he said.
Meanwhile, Finance Minister, Ken Ofori-Atta, has said Ghana could be the first country to introduce the currency.
Some economic analysts have expressed scepticism wanting to know if the introduction will have any significant impact on the economy as far as the subregion is concerned.
But Mr Amarteye-Anim said this could come with some economic benefits provided the prevailing environment is right.
The economist suggested that “we should be able to intensify trade among countries in the subregion. The last time I checked with the World Bank, trade within the countries in the subregion was not too great as compared to other countries outside the region.”
He said this will oil the engine as money will be moving within the countries, boost businesses and the currency will be strong.