• As NILDS DG says monetary union demands evidence-based assessment, protection of Nigeria’s interests

Sunday Aborisade in Abuja

The Emir of Kano and former Governor of the Central Bank of Nigeria (CBN), Muhammadu Sanusi II, on Thursday cautioned leaders of the Economic Community of West African States (ECOWAS) against rushing into the launch of the proposed ECO common currency.

He warned that a monetary union founded on weak economies, poor fiscal discipline and fragile institutions was destined to fail.

The Emir gave the warning at a one-day Policy Dialogue on “ECO Currency and Monetary Integration in West Africa: Implications for Nigeria,” organised by the National Institute for Legislative and Democratic Studies (NILDS) in Abuja.

Sanusi said the region remained far from meeting the fundamental requirements for a successful common currency arrangement.

He said, “A currency is only as strong as the economy behind it. History shows us that successful monetary unions are built on economic convergence, institutional credibility and shared prosperity, not aspiration alone.”

The former CBN governor acknowledged the potential benefits of the ECO project, including lower transaction costs, increased intra-regional trade and enhanced competitiveness.

He, however, stressed that monetary integration should not be driven by political symbolism but by sound economic fundamentals.

According to him, West Africa’s estimated population of about 450 million people and combined Gross Domestic Product of nearly $900 billion present enormous opportunities for economic growth and market expansion.

“The challenge before us is transforming this population into purchasing power, productivity and market integration,” he said.

Sanusi argued that the region’s youthful population should be viewed as an economic asset rather than a burden.

“These children have been born. These youths are alive. We are not going to bury them. What do you do with them? Do you turn them into economic agents that add to your productivity, or do you leave them as idle bandits, terrorists and thugs?” he asked.

He maintained that a common currency could make West Africa a more attractive destination for global investment by creating a larger integrated market free of exchange-rate barriers.

“Investors are better off looking at a West African economy with a single currency and no trade barriers than looking at Nigeria, Ghana or Sierra Leone alone,” he said.

Despite the potential gains, Sanusi insisted that the ECO must come at the end of a broader process of economic integration rather than serve as its starting point.

He said, “The common currency is often the most visible feature of a monetary union, but success depends on deeper economic and institutional foundations.

“While the common currency is listed as number one, it is actually the last step at the top of a pyramid,” he stated.

He identified political commitment, strong institutions, fiscal discipline, financial integration, labour mobility and trade integration as critical pillars for any sustainable monetary union.

Sanusi also warned that ongoing tensions between ECOWAS and the Alliance of Sahel States (AES), comprising Niger, Burkina Faso and Mali, could undermine efforts to establish a regional currency.

He said, “You cannot be talking about a common currency with Niger, Burkina Faso and Mali when you are threatening them with force in their internal matters. They will not even listen to you.

“Politics is so dominant in world affairs. If we do not manage the politics well, the economics can never work,” he added.

Calling for reconciliation among member states, the seasoned Economist stressed that regional unity remained indispensable to the success of the integration agenda.

“The unity of West Africa is sacrosanct. Whatever issues you have, you resolve them within the framework of a united ECOWAS,” he added.

Drawing lessons from the Eurozone, Sanusi noted that Europe first achieved significant economic convergence and institutional harmonisation before adopting a common currency.

He further defended the independence of central banks, warning against political interference in monetary policy and excessive money creation.

He said, “The central bank is not there as a printing press. You cannot print money and have a strong exchange rate. You cannot print money and have stable prices.”

Reflecting on his tenure as CBN governor, Sanusi disclosed that the late president Umaru Musa Yar’Adua and former president Goodluck Jonathan respected the autonomy of the apex bank and refrained from dictating monetary policy decisions.

He also expressed concern over rising public debt levels, warning that excessive borrowing could threaten long-term fiscal sustainability.

He said, “We are borrowing today like there is no tomorrow. We need to know where the money is going. We need fiscal sustainability.”

Presenting data on inflation, fiscal deficits and trade flows within the sub-region, Sanusi argued that ECOWAS economies were still far from achieving the convergence required for a viable monetary union.

According to him, intra-regional trade currently accounts for only about 10 to 12 per cent of total trade in West Africa, compared to roughly 60 per cent within the European Union.

He asked, “Would you give up monetary independence when trade is only 10 per cent?

“For you to get to ECO, you need trade of 60 per cent where we can clearly see the benefits outweighing the costs,” he said.

He concluded that the ultimate objective of the ECO project should be regional prosperity rather than the mere introduction of a common currency.

Sanusi said, “The ultimate objective is not a common currency but a more prosperous, connected and globally competitive West Africa.

“Build the foundations first. Macroeconomic convergence, payment system integration, trade integration, infrastructure and connectivity. The common currency comes last,” Sanusi said.

Earlier, Director-General of NILDS, Prof. Abubakar O. Sulaiman, described the proposed ECO currency as one of the most consequential economic and political initiatives ever contemplated within the ECOWAS sub-region.

“The quest for a common currency within the ECOWAS sub-region is not merely a technical pursuit; it is a profound economic and political undertaking with significant implications for the sovereignty, stability and prosperity of member states,” he said.

Sulaiman said the dialogue was convened to critically assess the prospects and implications of monetary integration, particularly for Nigeria as the largest economy in West Africa.

“Our objective is to move beyond abstract theory and engage with the practical realities of how a common currency might influence regional economic stability and, crucially, how it aligns with Nigeria’s domestic economic and development agenda,” he said.

He added that NILDS would ensure that recommendations from the dialogue provide lawmakers and policymakers with actionable insights for safeguarding Nigeria’s interests while advancing regional economic growth and integration.