Nigeria, other West African countries fail to meet criteria for single currency

Nigeria and five other West African countries have been unable to meet the criteria for the proposed single currency for countries in the zone.

Ngozi Egbuna, West African Monetary Institute (WAMI) director general made this known on Thursday in Abuja at the 37th meeting of the Committee of Governors of the Central Banks of the West African Monetary Zone.

The West African Monetary Zone (WAMZ) consists of The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone.

The Economic Community of West African States (ECOWAS) had approved the reduction of the convergence criteria from 11 to six.

At present, the three primary criteria 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 criteria are public debt/gross domestic product of not more than 70 percent; central bank financing of budget deficit should not be more than 10 percent of previous year’s tax revenue; and nominal exchange rate variation of plus or minus 10 percent.

Egbuna said a lot of work needs to be done if the 2020 deadline will be met.

She said three countries, The Gambia, Guinea and Nigeria, attained three criteria; while Ghana and Liberia achieved two criteria, and Sierra Leone met one criterion.

Godwin Emefiele, governor of the Central Bank of Nigeria, was elected chairman of WAMZ at the meeting.

Addressing delegates, Emefiele said member countries should not be blinded by the desire of a common currency to the adverse factors associated with a unified monetary environment.