As part of its plans to redress the region’s economic problems; leaders of the Economic Community of West African States (ECOWAS) have adopted the name ‘ECO’ for a planned single currency to be used in the region.
The 15 member group announced at the end of an ECOWAS summit in Abuja in July 2019.
Six member countries, including Nigeria, Liberia, and Ghana; could be swapping their currencies for a new one – the ECO.
Eight ECOWAS countries (Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo); currently jointly use the CFA franc.
Originally intended to be launched in 2000, the ECO has been postponed multiple times; and the newest target date is 2020.
The bloc, which represents an estimated population of about 385 million people; said it acknowledged a 2018 report which underlined “the worsening of the macroeconomic convergence”.
It also urged member states to do “more to improve on their performance”; as the deadline for the establishment of a monetary union approached.
The 2018 report called, among others, for the promotion and liberalisation of regional trade; the consolidation of the customs union and the creation of a free trade area – all of which are yet to be met.
Mahamadou Issoufou, ECOWAS chairman and Niger’s president; said there was “a real firm political will” to increase efforts ahead of the January 2020 deadline.
“We are of the view that countries that are ready will launch the single currency and countries; that are not ready will join the programme as they comply with all six convergence criteria,” Issoufou said.
According to a document made public by the bloc, ECOWAS will be working with the West African Monetary Agency (WAMA), the West Africa Monetary Institute (WAMI); and central banks to speed up the implementation of a new road map for the proposed single trade currency.
The African Development Bank Group (Afdb) in a report says; the 2020 deadline for the single currency will most like be postponed again unless the region can align with its monetary and fiscal policies.