Posted: Friday 15th August 2014 at 20:06 pm

Group proposes adoption of Nigeria’s Naira as ECOWAS currency

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The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) arm of the Organised Private Sector (OPS) has called for the adoption of Nigeria’s “Naira” as the single currency for ECOWAS sub region. 

NACCIMA said that for this to happen, first, the Naira should be revalued for it to be at par with the American dollar as it was in the 80s.

In a chat with Vanguard, John Isemede, NACCIMA Director General, pointed out that the much talked about economic integration has been elusive for years because the requirements for the convergence can’t be met by the participating countries.

He argued for instance, “our import cultures have not allowed economic integration and taking orders from other people to run our own country. Again, how can we achieve the economic bloc?  We are talking of the Common External Tariff which will take off next year; we are a sub region and not a custom union. For us to be a custom union, incentives, VAT, import duties, tariff and non-tariff must be the same thing.

Today, VAT in Nigeria is 5 percent, Benin Republic 20 percent; Ghana 17 percent and if we now have all these, why will the borders not be porous and smuggling not be booming because there is a big advantage of routing your goods through Nigeria at 5 percent.  How can we achieve free movement of goods with the differences in VAT.? “

In view of this, he said “If we can develop our economy internally like what happened in the 80s, today the naira can become ECOWAS single currency. I can give you the exchange rates of the Nigerian currency for over 30 years. In 1980 what was the exchange rate?  It was between 50 and 60 kobo to the U.S. Dollar.  When SAP was introduced it was N4.2 to a dollar in 1986.

“So all we have to do is to work on our own Naira because in the past, people were traveling with the Naira to abroad because the Naira was more or less the single currency in West Africa. If the value of the naira today is N50 to the US$, a lot of experts in America would come back to Nigeria because the value of the currency. If you are mighty, other economies will run after you,” he said.

According to him, Ghana Cedis and the CFA may not qualify for the single currency because they are overvalued and have been depreciating for almost 20 years; how can they meet the convergence?

“In fact, we cannot wait for this people because there can never be a convergence.  It can’t work. The CFA today is a member of the Euro because when France decided to surrender the French franc to Euro the CFA automatically became Euro; if you are doing business with francophone countries if you invoiced your goods in dollars and pounds, they may not pay you because their currency is not tied to dollar and pound.  But if you invoice your goods in Euro, you get your money in jiffy because their currency that was once tied to the French franc is now tied to the Euro,” he said.

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