Business - News - January 25, 2021

COVID-19 pandemic to delay ECOWAS single currency till January 1, 2022

Member-states granted waiver on meeting macroeconomic convergence criteria in 2021

The take-off of the Economic Community of West African States (ECOWAS) Single Currency Programme is to wait till January 1, 2022, the Heads of State and Government of ECOWAS announced on Sunday at the end of its 58th Ordinary Session.
Held via videoconference on Saturday, the meeting was presided by the Chair of the Authority, who is also the President of Ghana, Nana Akufo-Addo.
In a communique at the end of the meeting, the Authority lamented the devastating impact of COVID-19 pandemic on the economy of the region.
COVID-19 and Declining GDP
It noted a decline in ECOWAS real gross domestic product (GDP) from about 3.9 percent real growth rate in 2019 to about 1.7 percent in 2020 as a result of the impact of the COVID-19 pandemic.
The declining situation, the Authority said, created unfavourable economic conditions that have affected the Economic Performance of the region and the implementation of the regional integration programmes.
To revive the economies, they urged member-states to step up and accelerate the implementation of measures to combat the scourge of COVID-19 pandemic.
On the creation of a monetary union to allow the use of a common currency, ECO, the Authority noted the Significant deterioration in ECOWAS macroeconomic convergence situation in 2020, as a result of measures taken by member-states to combat COVID-19 and revive their economies.
Consequently, the Summit said it granted member-states a waiver on their effort to meeting the macroeconomic convergence criteria in 2021 considering the anticipated impact of the second wave of the pandemic on the region.
The conditions guiding the ECO’s six convergence criteria include a budget deficit of below 3 percent of GDP; public debt of no more than 70 percent of GDP; inflation rate of 5 percent or less; and a stable exchange rate.

Single currency programme
At the end of its 57th Ordinary Session in September 2020, in Niamey, Niger Republic, the ECOWAS leaders constituted a Ministerial committee to take steps to implement its decisions on the single currency programme.
While commending the committee for taking steps to achieve the objective, the Authority said it directed the Commission to work with the West African Monetary Agency (WAMA), West African Monetary Institute (WAMI), UEMOA Commission and Community Central Banks, to present an update on their activities in its next Ordinary Session.
The ministerial Committee is expected to submit the draft of the new Convergence and Macroeconomic Stability Pact among ECOWAS member-states to the session, with January 1, 2022 as the start date of the convergence phase and the new roadmap for the ECOWAS Single Currency Programme.
On the status of the implementation of the ECOWAS payment and settlements system, the Summit said the aim is to establish a multilateral mechanism for national currencies to be used for the payment and settlement of intra-Community transactions.
The Heads of State instructed the Commission, in conjunction with Community Central Banks and the West African Monetary Agency, to expedite work for the rapid interconnection of ECOWAS payments systems and submit a report at the next Ordinary Session in June, 2021.


AfCFTA and free movement of persons and goods

On African Continental Free Trade Area (AfCFTA), the Summit welcomed its coming into force on January 1, 2021 and the ratification of the agreement by 12 of the 15 ECOWAS member-states.
The Summit noted the submission to the African Union of common schedules of tariff concessions for trade in goods and specific commitments on trade in services in five priority sectors.
To maximize the benefits of the region’s membership of the AfCFTA, the Summit called on ECOWAS member-states yet to ratify the Agreement to accelerate the process of ratification in order to promote harmonious trade liberalization in the region and maintain the integrity of the ECOWAS Common External Tariff.

Also, the Authority directed the ECOWAS Commission to continue to support member-states in the development and implementation of national strategies for adaptation to the rules of the AfCFTA to be consistency with the regional strategy.

Besides, it urged the Commission to continue advocacy campaigns in member-states towards greater involvement of all governments, private sector and civil society, continuing to coordinate the positions and approaches of member-states in negotiations under the AfCFTA.
On free movement of persons and goods in the region, the Authority congratulated Nigeria over its decision to reopen its land borders with its neighbouring countries and called on other member-states to continue to effectively implement the Protocol on Free Movement of Persons, Right of Residence and Establishment.
On human development, the Authority endorsed the Declaration on Zero Tolerance for Sexual and Gender-Based Violence and the Elimination of All Forms of Violence against Women and Girls in the ECOWAS region.
It reaffirmed its commitment to promote the cooperation and collaboration across national borders between ECOWAS member-states and third countries, with a view to preventing and combating these vices.

Ongoing institutional reforms
Noting the ongoing institutional reforms in ECOWAS institutions, in particular the development of Vision 2050, formulation of a Monitoring and Evaluation Policy, and the Human Capital Development Programme, as well as the staff skills audit and the revision of the Staff Regulations, which are currently being finalized, the Authority directed the President of the Commission to continue the reduction of the operating costs of ECOWAS Institutions.
In attendance were Presidents of Nigeria (Muhammadu Buhari); Benin, Patrice Talon; Burkina Faso (Roch Kabore); f Cabe Verde (Jorge Fonseca0; Cote d’lvoire (Alassane Ouattara); The Gambia (Adama Barrow); Guinea (Alpha Conde); Guinea Bissau (Umaro Sissoco Embalo); Liberia (George Weah); Mali (Bah N’daw); Niger (Mahamadou lssoufou); Senegal (Macky Sall); Sierra Leone (Julius Bio), and Togo (Faure Gnassingbe).
Others were President of ECOWAS Commission, Jean-Claude Brou;
Special Representative of the United Nations Secretary General for West Africa and the Sahel (UNOWAS), Mohamed Ibn Chambas;
President of the Commission of the West African Economic and Monetary Union (UEMOA), Abdallah Boureima; Commissioner Peace and Security – AUC, Smaïl Chergui, representing Chairperson of the African Union Commission, Moussa Mahamat.
Part of the agenda of the meeting were consideration of the 2020 Annual Report of the President of the ECOWAS Commission and the reports of the 45th Ordinary Meeting of ECOWAS Mediation and Security Council and the 85th Ordinary Session of the ECOWAS Council of Ministers.
The next Ordinary Session of the Heads of State and Government of ECOWAS is scheduled for Accra, Ghana at a date yet to be fixed.

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

Insurance Contracts: NAICOM mobilizes towards new international financial reporting standard

The National Insurance Commission (NAICOM) has continued to mobilize its ranks towards the…