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Call For Caution On West African Monetary Union (2)

By on July 24, 2012

The situation in the Euro-zone and the current  ‘euro’ crisis has created a lot of concern for the Global economy and even the bailout funds pumped in by the European Central Bank for the major banks exposed to the regional risk is not a guarantee that the situation will be salvaged immediately.
Greece has had to work out a soft and tight budget this year as its ‘Debt Crisis’   the origin of the Euro-zone pandemic is really a potential threat to the regional financial and economic stability plan.

In retrospect the violation of the Budget and Regulation measures of the European Financial Stability Fund provision in the European Commission by France and Germany in 2004, set the precedence that will later engulf Greece  when it defaulted  in its Debt repayment between 2009 and 2010.
Global Political Economic analysts believe that the future of the ‘euro’ is bleak because the ‘Stabilization and Proper regulation Plan’ of the european monetary union had been levitated giving way to an imminent crisis in the region.

Relatively the West African Nation taking a cue from the euro-zone are close to finalizing the framework that will herald the operation of its Sub-regional Monetary policy that will facilitate a new common currency the ‘eco’.

President Goodluck Jonathan in the last general ecowas session of Heads of Government made a Strong statement on the need to fast-track the full Integration and Implementation process of the monetary and fiscal plan of the region that will birth the common currency initiative.

Events in life  have a way of teaching us lessons, and it is our ability to learn from the lessons that will determine our progress and advancement, it is on this basis that the west african Leaders should focus more on Complementing themselves to build strong and viable national economies and de-emphasize full integration.
Integration itself is not bad, but when Fundamental frameworks and  responsibility are not valued the Integration will degenerate to disintegration. The European Nations that hurriedly processed their integration are now living through pains to experience sustainability.

The wave of austerity that moved from Greece, to Portugal, Ireland, Italy, Spain,(PIIGS) axis is a result of the imbalance and lopsidedness in the whole design of the ‘euro’ alluded to the assertion that integration constitutes one of the factors that can destabilize regional economies.

At this stage  West African should be fast-tracking more Bi-Lateral and Multi-lateral agreements and partnership amongst themselves, build stronger networks on research and development, Consolidate their Political Institutions, Improving   their Legal Systems and framework.

The predicament of the ‘eurozone’ and the stress the European Central Bank is having in pumping in over 300billion euros to bail out Greece, Spain and most likely Italy is unfortunate but a lesson for other regionally minded economic zones to learn from.

In terms of resource endowment the West African economic zone is blessed with crude oil, diamond, bauxite, coal, silver, zinc, etc in greater measures than Europe, but the inability to fully utilize the resources has been the debacle of the ‘ecowas’ community.

So the big question is  Are all the members of the ‘ecowas’ ready to align their budget rules and economic models to the west African monetary union objectives? When France and Germany violated the budget rules in 2004 of the ‘eurozone’ they were let off the hook but Greece today isn’t that fortunate.

A proposal of having a central unit that monitors the budgets and economic activities of the members of the embattled   ‘eurozone’ is almost slowly and gradually eroding the sovereignty of member states because the economy and  political systems of nations have a symbiotic way of relating.

Germany the most stable of all the eurozone member nations, wants the  debt crisis ridden nations like Greece, Spain and Italy to show more fiscal discipline and frugality in their expenditure and budgets, because it is not ready to the bear the brunt of irresponsible nations.

Nigeria like Germany is the leading economy in the West African economic zone and even before the conceptualization of the ‘West African Monetary Union’ she has been of great assistance to nations in the zone like Niger, Benin, Togo, Ghana, Cotedvoire, Guinea-Bissau, Mali, and Senegal in terms of aiding political and economic stability.

One of the reasons the United Kingdom did not join the ‘eurozone’ was the visualization of a period when the irresponsibility and recklessness of some of the member states could spiral a terrible impact on its hard efforts to stabilize its economy since the 80’s.

Having observed the uncertainties and ambiguity created by the structural crisis of the ‘eurozone’  posing a threat to the global economy the wise step for Nigeria and the member states of the aspiring ‘West African Monetary Union’ to exercise caution on their zealous drive to integrate their economies.

By Ottoabasi Abasiekong, [email protected]