Rabat – In its bid to join the Economic Community of West African States (ECOWAS), Morocco has assured the organization that it would adopt a shared currency as soon as it is established. However, plans for a pan-West African money system continue to suffer from deadlock.
Throughout the past couple of years, Morocco has managed to anchor its position as a leader on the African scene. After rejoining the African Union, the kingdom is preparing to make a notable entry into the ECOWAS community.
“In the context of the royal tour in Africa, and particularly in certain countries of West Africa, and the instructions of King Mohammed VI, the Kingdom of Morocco has informed today, Her Excellency Ellen Johnson Sirleaf, President of Liberia and President-in-Office of the Economic Community of West African States (ECOWAS), its willingness to join this regional group as a full member,” a statement from the Foreign Ministry stated in February, kickstarting the official procedures.
On June 4, ECOWAS agreed in principle to the accession of the Kingdom in the midst of its community.
During his trip to Morocco late August, Marcel Alain De Souza, chairman of the ECOWAS Commission, explained that legal and technical provisions are underway to allow Morocco to become a full member of the West African community.
According to him, “the approach of the accession of Morocco to ECOWAS is on the right way and will be confirmed at the next ordinary session of the Community, on December 16 in Lomé.”
From a socio-economic point of view, Morocco’s accession will require the free movement of goods, services, persons, and capital and the establishment of a common external tariff (CET), as well as the implementation of risk prevention agreements and rules of good governance and democracy.
While the political and socio-economic prospects of Morocco’s accession to ECOWAS seem rather favorable, the kingdom still has a long and difficult way to go to be formally up to date with the legal and institutional reglementations of the West African community.
And according to Nasser Bourita, Minister of Economy and Finance, Morocco is up to the task. Reiterating the kingdom’s full commitment to this important step, Bourita stressed that it was born of “a willingness expressed at the highest level of the Moroccan State to crown historical, human, economic and political ties that have always linked Morocco to this region.”
One of these commitments is a matter of a joined currency. “Morocco is committed to joining a single currency on the day it is adopted by ECOWAS,” said the Chairman of the ECOWAS Commission, citing a Royal letter, during his recent visit to Morocco. Thus, the possibility that it would enter the economic zone without integrating the monetary zone is to be discarded.
A single currency in ECOWAS would offer West African countries the opportunity to pool their monetary resources in order to pursue their common and individual objectives.
As the ECOWAS member countries are currently experiencing serious external monetary issues, which it seems none of these countries can solve on their own, the single currency project comes as a possible way out of their economic crises.
The idea of ??a single currency for the ECOWAS area is not a new one. Since the establishment of the West African commission in 1975, this decision was postponed four times, soon to be five.
The Presidential Working Group, set up by the Heads of State and Government of the member countries, examined three options for monetary integration by 2020.
Looking to accelerate the introduction of the single currency, they recommended the adoption of the Gradual Option (Option 2). This would basically mean that member countries that meet the first-tier convergence criteria by 2020 will participate in the single currency.
Although it appears to be the most prudent of the three, Option 2 also carries risks, including the the possibility that the 2020 deadline for the launch of the project will not be met.
The other two options examined were the Big Bang (Option 1) and the Critical Mass (Option 3). In the Big Bang, all member countries would participate in the single currency by 2020, and countries that do not meet the ex-ante convergence criteria will respect them ex-post.
In the Critical Mass (Option 3), the single currency will be launched by 2020 if the majority of member countries, representing at least 75 percent of ECOWAS’ GDP, meets the convergence criteria.
Both Options 1 and 3 were however rejected, since the Working Group felt that the risks of subsequent macroeconomic instability were too high.
The second proposed option, that of gradual integration from 2020 onwards, was also eventually rejected, since the convergence criteria would not be respected by the countries concerned by that date.
In the midst of these disagreements, however, De Souza recently suggested that the introduction of a single currency for the region will once again be on the table in about 10 years, around 2027.