The International Monetary Fund (IMF)said the Economic Community Of West African States (ECOWAS) members' adoption of a common currency would only be achieved when appropriate economic measures were put in place, reported the News Agency of Nigeria on Wednesday.
This was contained in a report presented by IMF to the Technical Committee of the West African Monetary Agency (WAMA) meeting in Abuja on Tuesday.
The Fund report said the achievement of the common currency project would require a high degree of macroeconomic convergence, institutional development and political will.
It said fulfilling these conditions is a prerequisite if the foundation for a monetary union is to be strong.
The report said opening of the economies of member states fully to both intra-regional and global trade was critical to the process of preparing for monetary union.
It was learnt that creating a monetary union before the key conditions like policy convergence with institutional and regulatory arrangements could be detrimental to the project.
The report added that a rapid move toward achieving monetary union would not provide net economic benefits, as it could be economically costly to member states.
The IMF said in the report that such a move could be costly in terms of output, employment and price stability, noting that to minimize these risks, the regional body should ensure free movement of capital within the region.
According to the report, some of the measures include integrated banking systems, harmonization of securities listing requirements and unified payment system.
Source:Xinhua
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