BoG Governor 'cast doubts' over ECO’s introduction this year

Governor of the Bank of Ghana (BoG) says the planned introduction of the Eco, the new currency for the ECOWAS sub-region, this year “may not” happen as projected. 

Dr Ernerst Addisson says the pre-conditions necessary for introducing the currency are not place which makes it difficult to go ahead with implementation.

Background on the ECO  

The economic grouping, ECOWAS has struggled since 2000 to introduce the currency. One of the main reasons for this challenge has to do with the inability of the majority of its members in the West African Monetary Zone to meet the basic convergence criteria.

The introduction of the Eco has been postponed by more than five times. This is why some still doubt ECOWAS’ commitment to go ahead and introduce the currency this time around.

At the end of a meeting of the Anglogold Central Bank Governors and Finance Minister, they resolved to allow the Heads of state in the region to take the final decision on the issue. They also raise issues with the decision by the French-speaking countries to remain the CFA Franc as the Eco.

What has influenced the Governor’s fears on Eco’s introduction?    

Speaking to journalists on Friday, the Governor described issues surrounding the Eco as one of the more complicated developments over the past few months.    

The Governor noted that there are still some unresolved issues in terms of reaching the final decision for the Eco issuance.

Dr Addison added that first is the issue about Macro Economic  convergence criteria, which is a pre-requisite, “and if you look at the data most of the countries do not meet the this to enter into the common currency.”

The Governor also added that we can also talk about other complications like exchange rate agreements,  agreeing where should the headquarters be located.

Dr Addison observed that there are other unanswered questions like “ or agreeing whether you have a unitary or federal arraignment for the central bank.

“Therefore, we think that we need to take out time and find solutions to these problems before the introduction of the single currency” the Governor added.

Paying Deposits of defunct banks

The BoG Governor ruled out printing of currencies to help them pay all funds of depositors of the defunct banks. This follows a report that the central bank may be forced to print more money to meet the directive from President Akufo-Addo.

Speaking to journalists at the MPC press conference, Governor of the Bank of Ghana noted that they would not go that way “government has decided that we should pay all these depositors and so you leave it to us  and we will pay ”

He added that “but we are not going to pay by printing money as it has been suggested” “because printing money to do that would not help anyone if you print money you are going to cause inflation, you going devalue your currency, therefore, it’s important that we resolve this without printing money,” he added.