The development was confirmed on Thursday during the 37th meeting of the Committee of Governors of Central Banks of the West Africa Monetary Zone, which held at the headquarters of the Central Bank of Nigeria in Abuja.
The ECOWAS authority had approved the reduction of the macroeconomic convergence criteria from 11 (four primary and seven secondary criteria) to six criteria (three primary and three secondary criteria).
The three primary criteria being used are a budget deficit of not more than three per cent; average annual inflation of less than 10 per cent with a long-term goal of not more than five per cent by 2019; and gross reserves that could finance at least three months of imports.
The three secondary convergence criteria that have been adopted by ECOWAS are public debt/Gross Domestic Product of not more than 70 per cent; central bank financing of budget deficit should not be more than 10 per cent of previous year’s tax revenue; and nominal exchange rate variation of plus or minus 10 per cent.
Presenting a progress report at the opening session of the meeting, the Director-General, West Africa Monetary Institute (WAMI), Ngozi Egbuna, explained that as of December 2017, none of the countries met all the four criteria.
She, however, said the average performance of the member countries of the zone improved during the year under review.
For instance, Egbuna stated that The Gambia, Guinea and Nigeria attained three criteria each.
She said The Gambia missed the fiscal deficit criterion; Guinea slipped on the gross external reserves, while Nigeria missed inflation criteria.
She explained further that Ghana and Liberia achieved two criteria each.
Ghana, according to her, missed the inflation and fiscal deficit criteria, while Liberia missed the inflation and central bank financing criteria.
Sierra Leone, Egbuna added, met one criterion, which was the gross external reserves criterion.
Addressing delegates at the meeting, the Governor Central Bank of Nigeria (CBN) Godwin Emefiele, cautioned member countries not to let the desire for a common currency blind them to the adverse and contagion factors associated with a unified monetary environment.
He said, “Our desire for greater economic prosperity for our people through a common monetary union must not vitiate our awareness of the potential adverse and contagion factors associated with unified monetary area and common currency.
“The unfolding trade war between the United States, China and the West portends both opportunities and challenges for our region’s economy, depending on how we approach it individually as nations.
“Nonetheless, while the shocks to individual economies might vary in magnitude and intensity, it might yet be an opportunity for us to look inward and strategize on how best to fill the trade gap that will ensue.”
Emefiele added, “Now is the time to create the West African Monetary Zone Commission to drive our common interests and aspirations.
“We must intensify our level of cooperation and collaboration through strong bonds to work as a unit within the ECOWAS monetary union programme to achieve our shared objective.”
Emefiele called for greater collaboration among member countries as the ECOWAS region embarks on a thorough review of the economic conditions of member countries through their levels of preparedness for the monetary union and economic integration.
Meanwhile, the CBN governor has been elected as the Chairman of the West Africa Monetary Zone.
He was elected at the sub-regional meeting of the body being hosted by Nigeria.
The WAMZ was established in 2000 and comprises countries within the Economic Community of West African States (ECOWAS) that are working towards adopting their own common currency, the eco.
Speaking shortly after his unanimous election, Emefiele said that there was a greater work to be done to achieve the single currency objective of the zone by 2020.
“A lot of work needs to be done, especially in respect of the attainment of ECOWAS single currency by 2020,” he stated.
He further noted that everything that was required to be done would be actualised towards the achievements of the objectives of the regional organisation.
Emefiele restated Nigeria’s unflinching commitment to the single currency project in the sub-region and urged ECOWAS member countries to work towards achieving the convergence criteria.
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