Professor Uche Uwaleke, the President of Capital Market Academics of Nigeria, has said that Nigeria stands to gain a lot from the single currency proposed by the Economic Community of West States (ECOWAS).
Speaking during an interview in Abuja on Sunday, July 14. 2024, Uwaleke noted that if actualised, the ECOWAS single currency would facilitate free trade within the sub-region and would greatly benefit Nigeria as the largest economy in the sub-region.
He said a single currency once approved will improve the free- movement of goods, integration of capital markets, and economic integration in general.
“Given her huge population, Nigeria is positioned to benefit most from the free movement of goods and persons resulting from the implementation of a single currency.
“It will enhance capital formation and lead to increased volume of trade among member-states, expanding job opportunities and enabling growth and development in the region,” Uwaleke said.
Unrealistic target for ECOWAS
Speaking on the actualisation of the single currency by ECOWAS, Uwaleke warnedthat if there are lessons to be learnt from the experience with the Eurozone, there were enormous bottlenecks to be surmounted for the target date of 2027 to be realistic.
He said, “Unfortunately, it does seem that the target looks unrealistic. ECOWAS appears fragmented with the exit of three of its members. Virtually all member-states are far from meeting the primary convergence criteria set by the West African Monetary Institute.
“In the case of Nigeria, the leading economy in the region in terms of Gross Domestic Product (GDP) size, the inflation rate has been double-digit for many years.
“Actual budget deficit as a percentage of GDP has been more than four per cent, and the CBN direct financing of fiscal deficits has been in excess of 10 per cent,” he added.
Gross external reserves by member states
Continuing, the financial Don, said of all ECOWAS members, none can boast of gross external reserves capable of financing three months of imports.
He added, “There is equally the fact that France is not supporting the French-speaking member States UEMOA, to have independent central banks.
“Against this backdrop, the first task for ECOWAS in the direction of a single currency is to unite politically, lure back the three countries that exited into their fold and then support each other to strengthen their domestic economies.
“Any attempt to inaugurate a single currency without ECOWAS first putting its house in order will witness a still-birth project,” Uwaleke said.
