Experts differ on Morocco’s commitment to join a single currency of ECOWAS
'Geostrategically, the horizon of strategic development for the Moroccan economy is Africa because Morocco has been facing many obstacles from the European Union.', El Mehdi Fakir, an economist and a strategy and risk management consultant
2017/09/10 Issue: 122 Page: 18
The Arab Weekly
Casablanca - Morocco expressed its commitment to join a single currency if adopted by the Eco¬nomic Community of West African States (ECOWAS), three months after the regional body agreed in principle to Rabat’s request to join it.
President of the Commission of ECOWAS Marcel De Souza said Moroccan King Mohammed VI stressed in a letter that “Morocco is committed to joining a single cur¬rency on the day it will be adopted by the ECOWAS.” De Souza said the establishment of the single curren¬cy should take about ten years.
ECOWAS includes 15 West African countries, although none shares a border with Morocco.
Morocco is a “privileged strate¬gic partner” of ECOWAS but the 15 heads of state decided to make the North African kingdom the 16th member of the economic commu¬nity, a move to be formalised De¬cember 16 in Togo at the next ECO¬WAS summit.
Experts differ on the stakes of Morocco’s commitment to join ECOWAS.
El Mehdi Fakir, an economist and a strategy and risk management consultant, said Morocco would greatly benefit from the ECOWAS market, which totals 700 million people and is the youngest in the world.
“Geostrategically, the horizon of strategic development for the Mo¬roccan economy is Africa because Morocco has been facing many ob¬stacles from the European Union especially in agricultural exports,” said Fakir.
“The signing of the gas pipeline agreement between Morocco and Nigeria was really a beginning of a real integration both economically and politically.”
Morocco and Nigeria last De¬cember agreed to build a 4,000km pipeline to carry Nigerian natural gas to North Africa and Europe. The pipeline, which is to run along the West African coast from Nigeria to Morocco, is considered a major ini¬tiative to boost energy production in the African continent.
Fakir said the road is long for the single currency to happen in ECO¬WAS.
“The adoption of ECOWAS’s sin¬gle currency in the future will al¬low Morocco to fully integrate in the West African market regardless of its geographic location,” he said, predicting that it would take at least 15 years to get it implemented.
“Colossal efforts and stringent procedures and mechanisms are required to achieve the single cur¬rency,” he said, adding that a full economic integration within ECO¬WAS would only happen with the support of big Western powers.
“ECOWAS member states under¬stood that their economies need to be stronger after they lost genera¬tions serving the big powers’ inter¬ests,” he said.
ECOWAS brings together coun¬tries that are largely poor, although rich in natural resources. Half of its members have experienced armed conflicts in the past two decades.
Professor Lotfi Abourizk at the Hassan II Faculty of Law and Eco¬nomics in Casablanca was less op¬timistic about the prospects of a single currency. He said ECOWAS must fulfil many obstacles before introducing a single currency.
“The four primary and indispen¬sable criteria are an optimal infla¬tion rate of less than 5%, a govern¬ment budget deficit of less than 4%, a financing of the budget deficit by the Central Bank within 10% of tax revenues of the previous year and maintaining a level of foreign ex¬change reserves,” he said.
“We know very well inflation rates in some West African coun¬tries are very high while others suf¬fer from huge budget deficits be¬cause their economies heavily rely on commodities such as oil and co¬coa whose prices have dramatically declined.”
All currencies of ECOWAS states are to disappear by 2027, allowing for a single currency with an issu¬ing institution and a central bank in Africa.
The nature of the single currency might be another constraint that could cause disagreements within ECOWAS. Côte d’Ivoire President Alassane Ouattara expressed inter¬est in adopting the CFA franc as the bloc’s single currency.
The CFA franc is shared by eight countries of the West African Economic and Monetary Union. France, the colonial power of all those countries, is the guarantor of the CFA franc convertibility. Other countries have their own curren-cies.
“Will there be a court like the Eu¬ropean Court of Justice to solve le¬gal or trade disputes between mem¬ber states? Will ECOWAS members meet all the convergence criteria?” asked Abourizk.