West Africa gets a new currency – it’s called the ECO

Sierra Leone Telegraph: 2 July 2019:

Starting next January 2020, countries within the West African sub-region will be able to use a single currency called the ECO. The new single currency was adopted by the ECOWAS Heads of State and Government last Saturday, in Nigeria’s capital Abuja, after decades of discussion towards achieving regional economic integration.

The West African leaders endorsed the currency at their 55th Ordinary Session, along with a road map leading to citizens across the region being able to use the single currency on 1st of January 2020.

The previous roadmap spelling out the paths to single currency outlined three primary criteria for the adoption of the currency and ensure convergence of the various economies.

The most important of these criteria include the need for each ECOWAS member country having a budget deficit of not more than 3%; an average annual inflation of less than 10% with a long-term goal of not more than 5% by 2019; and gross reserves that can finance at least three months of imports.

The other convergence criteria that have been adopted by ECOWAS is that a member country’s public debt must be less than 70% of the country’s Gross Domestic Product.

There is also the issue of central banks financing budget deficit not more than 10% of previous year’s tax revenue, and nominal exchange rate variation of plus or minus 10%.

At the end of the Abuja meeting a communiqué read by Nigeria’s Permanent Secretary, Ministry of Foreign Affairs, Mustapha Suleiman noted that the regional leaders instructed the ECOWAS Commission to work in collaboration with West African Monetary Agency.

The commission is also expected to work with West African Monetary Institute and all central banks to settle on a symbol for the single currency – the Eco.

The ECOWAS Chairman President Issoufou Mahamadou has said that the revised roadmap does not affect the date for the issuance of the single currency in January 2020.

Speaking about the deadline for adoption Mahamadou said: “We have not changed that but we will continue with assessment between now and then.

“We are of the view that countries that are ready will launch the single currency and countries that are not yet ready will join the programme as they comply with all six convergence criteria.”

Established in 1975, ECOWAS has a combined population of 385 million across the following countries: Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.

But what could make integration and a move towards a single currency difficult, is that eight of these countries – Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo, are currently using one currency – the CFA franc.

It is not yet clear how much the total cost of moving to a single currency will be for the region, nor for each of the West African countries involved, nearly all of whom are suffering from serious economic stagnation.

16 Comments

  1. Ghanaian leaders must think and act to help Ghanaians. Why do you like reckless amanuencies? Where did Nkrumah’s effort to unite West Africa and Africa as a whole take Ghana to? Why don’t you learn from history and be like UK in the European union? Have you thought about 419 Nigerians’ ever insatiable appetite for free money from the computers in their closest? If you can’t continue to rue the Ghana Nkrumah carved for us, leave us and naturalise with Nigeria and co.

    • Thank you very much Dr. Nato for your analysis. I have already given the name SALEXIT and I believe that many Sierra Leoneans will vigorously and aggressively pursue SALEXIT if ECO fails to deliver the goods for the people of Sierra Leone. Maybe, the Ghanaians will think about GHANEXIT if ECO fails to deliver.

      Thanks Dr. Nato and may GOD BLESS YOU.

    • Hello Dr Neto, its not free money and never free money. Those you see doing that put extra strength to get that. They are just on course of recovering our wealth taken from us in a dubious way by the colonialists when they came. And besides, Ghana is involved in this computer recovery too, don’t act to be a saint. Proudly Nigerian.

  2. It will surely happen, as long our leaders are on the same developmental plain and corruption Free.

  3. Better late than never. Next on the agenda is the inter roads connectivity in the region. If other regions stay waiting for Uncle Sam or Big Brother Britain to give command in the process than we in the West will be ahead of them. I look forward to the day when all our resources will be processed on the continent.

  4. It’s very good to implement this one currency for West Africans, I think and I’m very sure this will help us enough especially in trading, the leaders should do their best to bring into existence this idea.

    • Single currency in West Africa will enhance trade among members countries. Africa is progressing gradually in the West.

    • I’m hoping to see this come through. We might face some challenges for the first ten years or more to come, but no brexit please. Let’s all fight and make it do-able. Africa will work again.

  5. This single currency is a good development, but, nevertheless, it can’t solve west Africa’s problems because other factors (factor mobility, effective free trade along the member countries and tax treaty) that will enhance the effectiveness of the currency were not considered along side.

    • That’s great idea from the West African countries and I like the example they set out for the world to understand that we are not a joke in this world.

  6. Who is behind the ECO? Those 8 CFA nations, are they joining as individual economic nations or will the French central bank be in control of their ECO activities?

    What is preventing our leaders, finance ministers and bank governors from formally announcing this development to their citizens?

    Yes it’s economically viable, trading with a single currency in 15 nation with more than 300 million inhabitants. Heads-up Africa leaders, remember that without full control of your economies, your nations will struggle. Trust in your nation’s technocrats, give us space to explore, so that our surveys/research can be used in international podiums.

    • Abdul Salam Bagoura, very good question! They need to be bold enough and have this colonial ties severed for once and good. Any baby brought into this life God’s ways, lives without the umbilical cord. Why can’t they exist for once without their French masters?!

  7. A single West African currency? The only thing I thought of after this announcement was SALEXIT. DISCUSS!

  8. SINGLE CURRENCY

    The implementation of a single currency in West Africa is a great achievement by ECOWAS. It will ease doing business activity and monetary transactions across the region.

    Travelling across the region will become a lot more easier in terms of monetary dealings and we can easily measure the inflationary tendencies across member states before we set out from home.

    This is a rousing development which must be welcome with euphoria by West African citizens.

Leave a Reply

Your email address will not be published.


*


This site uses Akismet to reduce spam. Learn how your comment data is processed.