The chief executive officer of the Gambia Chamber of Commerce has urged the ECOWAS member countries to look into the possibility of using the CFA franc as the basis for the introduction of a single currency in the region.
Speaking on the sideline of the West African Monetary Zone ministers’ forum which ended at the Kairaba Beach Hotel last Friday, Alieu Secka said the priority should be given to common interest of the region rather than loyalties to colonial relics, Anglophone and Francophone.
“I think our strength is that we already have the CFA franc zone and we can learn many lesson from that,” he argued.
“We should just adopt the CFA system to start with and get over the loyalties to Francophone and Anglophone and the nationalistic views that we may have. The CFA zone is not perfect but we can build upon that rather than reinventing the wheel.”
The francophone West Africa made up of Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal, and Togo has a common currency: the CFA franc inherited from France, the colonial rulers of these countries.
However, the Anglophone West African countries have been battling since the formation of ECOWAS in 1975 to have a single currency zone but continued to have setbacks because of its member states’ repeated failures to meet the set criteria for its implementation.
Critics said the regional bloc’s aim of a common currency with an intra-trade activity at 10% low, enormous variances in fiscal policies and inability to facilitate freedom movement of people and goods across borders, will tantamount to putting the cart before the horse.
However, Khan said adopting single currency in ECOWAS region is a good idea citing the Euro zone as an example.
“I think the idea of single currency makes sense- look at what is happening in the European Union,” he said.
The fate of Euro has had a historic test this year as three of the monetary zones member states- Greece, Italy and Spain- sank into a recession, sending a chilling message through the spine of the zone’s biggest economic heavyweights who were determined to save the currency.
However, Khan said despite the intricacies that come with a monetary union the challenge is worth a try given the economic benefits attached.
“The problem that the Euro zone is facing with respect to Greece can happen any where but that does not mean that because there is some of element of risk when it comes to single currency, we should not take decisive and bold steps,” he said.
“Whether it is Greece, Italy of Spain that had some financial challenges, it did not affect the overall performance of the Euro currency. As a matter of fact our economies are not homogenous and they are of different size.”
The Gambia chamber of commerce serves as the interface between Government and businesses in The Gambia and Khan said ECOWAS and most particularly the WAMZ zone should improve on intra-regional trade.
“Trade between ECOWAS countries is at 10% and between WAMZ countries is at 1% and in the whole of Africa it is 12%. We have a long way to go. Officials that are in charge of implementing the regional trade protocols have to do a better job,” he noted.
“Intra-regional trade is very important. Look at the impact that it has in Europe and other blocs and the amount of market growth they have experience and the number of jobs created as a result of increased economic activity caused by intra-trade. Tax base equally increase with increase in trade so does the operation of ports and many other things.”
Khan observed that regardless of the progress ECOWAS region has made since in establishment in 1975, issues such as infrastructural challenges, transport and structural challenges still impedes the effectiveness of intra-trade amongst its member states.
“The ECOWAS citizens should continue to challenge all these governments so that they can actually implement all the regional protocols that have been signed by the ECOWAS heads of states to ensure that trade takes place,” he said.
“For example, the ECOWAS protocol on free movement of trade and persons. If you go to any of our borders, the cumbersome process you go through is totally unnecessary and uncalled for and actually in contravention of ECOWAS protocols. But sadly those that are on the ground tend to continue to implement undue process that discourages and disincentivise cross-border trade.”