Why Eco is a joke, not in Nigeria’s interest, by experts

• Blame Nigeria For Dithering On Decision
• ‘Most ECOWAS Central Banks Have Not Audited Accounts In Four Years’

Economic experts have cautioned Nigerians holding the bated breath and anxiously waiting for the much-hyped Eco currency implementation this year 2020, as a common currency for the ECOWAS sub-region.

They have been advised to drop their apprehensions because the declaration by some ECOWAS countries remains a fluke and a joke, as conditions are not yet ripe for the implementation of the single currency for the region, at least not in the foreseeable two years.

They also warned that Nigeria hastily signing to the new planned currency means surrendering her fiscal and monetary sovereignty, including her foreign reserves which are more than 60 per cent of the entire sub-region to the ECOWAS Central Bank, which structure and form nobody knows yet.

One of the experts who called for the dousing of tension is frontline economist, Professor Godwin Owoh, the Executive Chairman of the Society for Analytical Economics and former advisor to former Governor of the Central Bank of Nigeria (CBN) Prof. Chukwuma Soludo, while at the CBN.

Speaking exclusively to The Guardian, yesterday, the technocrat declared that evidence indicates that the basic requirement for the convergence of the sub-region currencies, which is the audit and verification of the various ECOWAS Central Banks’ accounts has not happened.

He noted: “I know this of a fact, that even Nigeria that is the leading stakeholders in this project has not had its CBN accounts audited and verified in the past four years. And it takes a minimum of two years to achieve this. So I don’t see any magic happening with the Eco implementation this year. How do you converge when you don’t know your individual countries’ balance. At best what could happen is to float a spirit currency among members, which is not the same thing as a convergent currency.

“The attempt to have a common currency has been on before the year 2000 and it has suffered multiple postponements because members have consistently failed to meet the convergent criteria, with Nigeria always leading in the breach. So what I expected ECOWAS to do was to have reduced the criteria to say one: integrity and transparency as it has been so difficult for countries to meet the about four criteria.”

Owoh then chided the Nigerian Finance Minister, Mrs. Zainab Shamsuna Ahmed for dithering on the truth by simply saying Nigeria was not ready then to say Nigeria was studying the development.

“What are you studying? Something that you are a major stakeholder and you are supposed to be a driver?  I think she should just come out clean and tell ECOWAS that Nigeria is not ready to surrender her currency because there is even no structure for the implementation yet on the ground. You need to see the way the IMF described in uncomplimentary terms the different styles of monetary policies in operation in the ECOWAS region countries, with Nigeria’s like the worst and I’m not surprised because the CBN, in particular, is operating as a political party. Is it this the kind of situation that you are converging?” Prof. Owoh further asked rhetorically.

Speaking in the same vein, a Development Economist and social commentator, Mr. Odilim Enwegbara, also advised Nigeria against signing off to the Eco, saying it would mean subjugating her economic independence to France.

He stated: “But will Nigeria surrender its Naira to the Eco, especially Eco that has most of its monetary policy measures taken in both Munich and Paris? It is going to be the most unlikely. The obvious are two. First, Nigeria cannot surrender its currency, which means surrendering its sovereignty, without first having to amend its constitution to accommodate that. Second, this will also require harmonising the country’s banking and financial legislation to match the Eco common currency realities. Given Nigeria’s peculiar economic and financial situation, which is far ahead of all the other Eco-zone member states, these inevitable changes will definitely be easier said than done.

“Given that West African countries are dependent on commodities imports from the euro-zone, the fact that the prices of these commodities are internationally regulated and externally controlled, further subjects eco money supply, interest rates, and exchange rates to be dependent on euro.

“So, every diversification effort in eco-zone economies will be undermined by euro monetary policymakers, whose only interest remains to use the monetary policy to indirectly keep eco-zone economies as exporters of raw materials in euro, especially because most of the imports from the same eco-zone economies will have to officially pass through euro.”  

“This will mean permanent undermining of ECOWAS members’ industrialisation. It will also mean a lack of job opportunities, economic prosperity, and social inclusion. It will also mean low tax receipts for the government, which also means social and infrastructure needs unattended. But we all know that high unemployment and social inequality will further trigger increased insecurity and ethno-religious conflicts. Without increased system liquidity to lower the cost of borrowing, loanable funds will never be available to small businesses. Definitely, the eco-zone economies will remain agrarian without infant industry industrialisation,” Enwegbara further warned.