We need trade, not single currency -Pianim

An Economic Consultant, Mr. Kwame Pianim, has observed that a single currency for the West African sub-region is not the panacea for the macro-economic instability that has been hampering the development of the sub-region.

Moreover, Mr. Pianim contends, the countries of the sub-region lack the institutional capacity and the personnel to effectively manage the introduction of a single currency.

"Can you imagine trying to distribute the currency if we printed it now to Sierra Leone, Liberia over-shooting war? In Nigeria? Armed robbers would take it. We don't have enough policemen to supervise it."

Mr. Pianim said to improve the quality of life of the sub-region there is the need to broaden the market base to attract foreign investors, but this is not done through the creation of a single currency.

"The way to go about it is to start gradually removing the barriers to trade for we trade very little among ourselves, only 11 per cent." Mr. Pianim said.

Pianim was speaking on Joy FM's Breakfast Show programme yesterday morning.

"We have no volume of trade among ourselves. We have to increase the volume of trade, and that is when we will need the means for facilitating trading," Pianim said, explaining that a single currency is just to facilitate trade.

"If you don't have a bicycle chain you don't need oil to oil it to run smoothly. Let's create the chain - the trade collaboration - and then we will need the oil which is the money, the currency to grease it to make it go smoothly." Pianim said.

He said throughout the world economic integration takes place from removing barriers through trade and cooperation and not a single currency, adding that the introduction of a single currency might further widen the Francophone-Anglophone divide.

Pianim dismissed the assumption that the creation of a monetary zone will bring fiscal discipline, explaining that we need fiscal and economic discipline to meet the convergent criteria for the creation of a single currency. He criticized the penchant to create new institutions whenever we are faced with a problem and suggested the harmonization of administration and regulatory policies among the countries of the sub-region.

Pianim prescribed fiscal discipline for governments in the sub-region, saying if, for instance, the Ghana Government cut its expenditure and accessed only about 30 per cent of the commercial credit available, the remaining 70 per cent would be available to the private sector, which is expected to be the engine of growth of the economy.

The Economic Consultant advised against the practice of hiding behind new institutions for solutions to our economic problems, adding that ECOWAS has been in existence since the 1970s, yet countries of the sub-region cannot trade among themselves.

Turning to the current situation in this country, Pianim said even though we in Ghana have a unique opportunity to get this county going because we have become an oasis of stability in conflict-torn sub-region, we are fighting among ourselves politically and giving the impression to the outside world that Ghana is not stable.

"Once Ivory Coast becomes stabilized, we can forget about becoming the gate-way to West Africa. Once Nigeria can get their act together we can forget about anybody coming to Ghana.