WEST African countries have been advised to abandon the proposed common currency and rather leverage on digital financial technology to boost trade within the region.
Author of the book on ‘The Future of Banking” and acclaimed trend-watcher, Mr. Adjiedj Bakas, gave this advice while delivering a keynote address at the World Conference of Banking Institutes hosted in Lagos yesterday by the Chartered Institute of Bankers of Nigeria (CIBN).
The launching and take off of the West African single currency, known as ‘Eco’ has been postponed four times, in 2003, 2005, 2009 and 2015, due to the inability of the West African countries to comply with all the four primary convergence criteria simultaneously and on sustainable basis.
The convergence criteria include: A single digit inflation rate; fiscal deficit of not more than four per cent; deficit financing not more than 10 per cent of the previous year’s tax revenues; and gross external reserves that can give import cover for a minimum of three months.
Speaking on the theme of the conference, “Re-thinking the future of banking and finance and lifelong learning”, Bakis said that a single currency is not good for the region given the diversities of the cultures and economies of the countries in the region. He added that single currency idea was no longer expedient in the light of current trends in digital finance and the experience of Europe with the ‘Euro’.
Speaking further to Vanguard on the sidelines of the conference, Bakis stated: “The single currency is not good because the countries, the cultures and the economies are too different, like in Europe, to melt it down in one currency.
“So every country should keep its own currency or its own economy. What you can do is to use the block chain technology of the bitcoin, to create a parallel currency for trade. So let’s say if Nigeria wants to export something to Zambia, you can use that parallel currency, which today is in US dollar. But today you can create another currency and that is the nice thing about the blockchain technology, you can keep on creating currencies.”