President of the Africa development bank (AfDB), Akinwunmi Adesina, has declared support for the recently adopted ‘Eco’ unified currency for West African countries.
The Eco which will be replacing the CFA franc has been adopted by eight ECOWAS francophone countries namely Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo, with Ghana also showing serious interest.
The adoption which was declared by the West African Economic and Monetary Union (UEMOA) is expected to be introduced in 2020.
Adesina who paid a courtesy visit to President Muhammadu Buhari at the statehouse on Tuesday revealed that some criteria’s would have to be met before the region can fully be integrated.
He explained that the initiative is a great idea, owing to the African Continental Free Trade Area (AfCFTA) which will bring over $3.3 trillion in terms of trade to the region.
“I think that at the end of the day the biggest thing to happen to Africa is the African Continental Free Trade Area (AfCFTA); that free trade area itself is worth over $3.3 trillion in terms of trade.
“Obviously being able to trade in various currencies, it’s not optimum to trade in so many currencies. So it makes common sense to have a unified currency and of course for that to even been achieved – the Eco, I support Eco greatly, I think it’s a great idea to do.
“But obviously, there are a number of convergence criteria that would have to be met and I am sure that our President is talking with other presidents to be sure that they can meet those criteria and the region can be fully integrated,” he added.
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On the issue of pegging the Eco with the Euro in valuation, Mr Adesina stressed that the region needs to ensure well-integrated monetary and fiscal policies.
“The issue for us is going to be how to have a well-integrated monetary policy and fiscal policy within the region, which is the most important thing first, and then you figure out the rest later.
“But I am very encouraged with the progress of the Heads of State on this particular issue, and I am very confident that President Muhammadu Buhari will make even greater progress on that,” he expressed.
The AfDB boss who was recently endorsed by the ECOWAS Heads of State for a second term as President of AfDB said the bank is working towards bridging the roughly $68 billion to $108 billion infrastructure financing gap in the region.
He recommended that the $1.8trillion sovereign wealth and pension fund can be used to close very quickly the infrastructure gap talked about.
“When it comes to the issue of even trade and competitiveness, at the end of the day you have basic things that have to be done. Today Africa has an infrastructure gap of about roughly $68 billion to $108 billion infrastructure financing gap.
“When it comes to the issue of attracting capital to do that, there are three things that I will say: first, we have to also look at home. Today in Africa, the size of the sovereign wealth fund and pension fund and insurance pull of fund (mutual funds) is about $1.8trillion. If we can just tap a little bit of that, we will close very quickly the infrastructure gap that we are talking about,” he said.