The convergence criteria necessary for the creation of a single West African currency are not there, due to the health crisis. From next year, the slow process will resume, hope the heads of state of ECOWAS.
The Heads of State of ECOWAS (Community of West African States) met on January 24, 2021. They took note of the figures concerning the Covid-19 pandemic and the delays and progress made for the to counter. The Community will set up a special fund to purchase vaccine doses as soon as possible, in addition to the devices already planned.
The Conference took note of the “unfavorable development” of economic activities in 2020. The year ends with a decline of 1.7% of real GDP, after real growth of 3.9% in 2019, according to data, still provisional.
The Conference “urges Member States to accelerate and intensify the implementation of measures in the context of the fight against Covid-19 and the revival of economies”.
With regard to the creation of the Monetary Union, the Heads of State took note of the delay in macroeconomic convergence of the countries of the Community. Stimulus and support measures translate into increased indebtedness, while the crisis has not had the same inflationary effects in all countries.
“In view of the foreseeable impact of the second wave of the pandemic on the state of macroeconomic convergence in 2021, the Summit decides to exempt member states from meeting the macroeconomic convergence criteria during the year 2021.”
In other words, the creation of the eco, West Africa’s new single currency, is impossible in the short term. Also, the various monetary authorities in charge of this file must draw up “a new Convergence and Macroeconomic Stability Pact between ECOWAS member states, with January 1, 2022 as the start date of the convergence phase”. They must also establish the new Roadmap for the Single Currency Program.
Zlecaf is progressing well!
“Beyond the Covid-19, we were in a situation where our economies were weak”, comments the Burkinabe Minister of the Economy, to the Sidwaya website. From January 2022, the Convergence Pact, which includes the various deficit and inflation criteria to be met, will be implemented. “It is estimated that during the three years, states must make efforts so that by 2025, we can achieve a common currency,” said Lassané Kaboré.
In addition, the heads of state took note of the progress of the ECOWAS payments and regulations system. This aims to create a multilateral mechanism that will allow the use of national currencies for the payment and settlement of intra-community transactions.
Competent authorities are urged to “speed up work for the urgent interconnection of ECOWAS payment systems”. A new milestone will be completed in June 2021.
Regarding the AfCFTA (African Continental Free Trade Area), the Heads of State announced that “common lists of tariff concessions for trade in goods and specific commitments for trade in services in five priority sectors” have been submitted to the African Union. They call on the Member States that have not yet ratified the agreement to speed up the process, in order to preserve the “integrity of the ECOWAS Common External Tariff”.
Finally, on the pandemic front, the Conference welcomes the “good management” of Covid-19, “through bold measures and solid initiatives” taken in the various member countries.
Speed up vaccine delivery!
The Conference is also taking a group purchasing approach for Covid vaccines. The ECOWAS Commission will set up a revolving fund to acquire vaccines. A call is made to help governments, development banks, the private sector and partners to contribute. “This fund will be used to ensure the availability of anti-Covid vaccines in the region, through short-term common supply and regional manufacturing in the medium and long term.”
It will finance the process of supplying 240 million doses of vaccines, preferably those approved by WHO. This, through direct and collaborative approaches with manufacturers, partners and friendly foreign governments who may be willing to sell additional doses they have previously acquired. The Conference expects vaccination campaigns to start no later than the end of June 2021.
