By: G. Bennie Bravo Johnson I
Liberia’s Vice President, Jeremiah Kpan Koung, has announced that six African nations are set to collaborate on the implementation of a single currency regime aimed at fostering economic integration across the region.
Speaking at the 17th Annual Banking and Finance Conference in Abuja, Nigeria, on September 10, 2024, Vice President Koung identified the participating countries as Liberia, Ghana, Gambia, Guinea, Sierra Leone, and Nigeria. He emphasized that this policy framework is designed to serve as a foundation for establishing a common currency for all member states of the Economic Community of West African States (ECOWAS).
Vice President Koung stressed the importance of collective action among the six nations, asserting that they must make prudent economic decisions to reduce debt levels and stabilize exchange rates to realize this ambitious vision. The proposed single currency initiative is expected to enhance trade and economic cooperation within the region, ultimately contributing to greater financial stability and growth for the participating countries.
“As the global economy continues to expand, African leaders have emphasized the need for regional economic integration, trade, and commerce. With the signing of the African Continental Free Trade Area, we have an opportunity to harmonize fiscal and monetary policies and encourage intra-Africa trade through our banking institutions,” he noted. However, Vice President Koung narrated that while Liberia is currently experiencing a gradual expansion of commercial banks within our economy, he strongly believes that a call for more investment and development banks is necessary for rapid economic growth and development.
Liberia’s Vice President said, “These investment banks are more flexible for long-term loans and relatively offer low-interest rates. For our economy to accelerate quickly, it will require the provision of capital for investment in energy, agriculture, infrastructure, trade, and exploration.” He indicated that in Liberia, the Liberia Bank for Development and Investment (LBDI) is the only investment and development bank in the country; adding, that although it also performs both investment and commercial functions, the LBDI lacks the capital required to contribute to Liberia’s ambitious economic transformation plan.
“Considering the absence of other investment and development banks within our economy, we have relied heavily on multi-lateral development institutions like the African Development Bank, the World Bank, and others to finance our development projects,” Veep Koung explained. The Vice President added that the convergence at the conference must offer a new strategy for banking and investment, especially in struggling economies.
“Let us be reminded that economic empowerment of individuals and small businesses is critical for savings and investments. We should never forget about the opportunities that come with investment in our local economies. As leaders, we have an essential role in working with our national institutions to create a safe environment where trade and investment can succeed,” Vice President Koung said. He narrated that the Government’s ARREST Agenda offers opportunities to encourage potential investors in the areas of agriculture, roads, rule of law, education, sanitation, and tourism.
The Vice President indicated that to strengthen the banking sector, Africa must continue to work on policy reforms to reduce the rate of default on loans by borrowers; saying, it is a major challenge for the banking sector, and many of the banks continue to report losses based on default payments on loans. He said, that in Liberia, the Central Bank is working very hard to support banks with high default rates to improve the nation’s foreign exchange reserves.
“I remain hopeful that this conference will engender new policy directions to collectively improve our banking sectors and offer new opportunities for investments, trade, and commerce,” he stated. Vice President Koung explained, “Liberia stands ready to embrace potential investors. The lives of our people must be transformed. Only then, we can boast of the acceleration of economic growth and development.”
