15 West African states (ECOWAS) intend to replace the CFA franc and seven national currencies with eco, a single currency that will facilitate trade between these countries.
This project, which has been under discussion for years, should see the light of day in 2020.
The countries of West Africa (ECOWAS) have agreed to adopt a single currency by 2020. It remained to know its name. It will be eco, according to the magazine Jeune Afrique. This name was agreed by the interministerial committee of finance ministers and central bank governors of the area, which met Monday and Tuesday in Abidjan, reports the magazine.
Sea snake spoken for 30 years, the single currency of ECOWAS would replace the CFA franc and seven other national currencies, which are not convertible between them, which does not facilitate trade. The management of the single currency should be entrusted to a federal central bank and its exchange rate should be flexible, according to the report adopted by the interdepartmental committee, quoted by Jeune Afrique. The findings of this report will be submitted to ECOWAS Heads of State and Government at their next summit in Abuja on 29 June.
Nigeria, which had long opposed the creation of the single currency, seems to have lifted its reserves, said the Ivorian Minister of Economy and Finance, Adama Koné. “Nigeria today is not yesterday’s,” he told reporters. Nigeria has demanded countries in the franc zone to disconnect from the French Treasury, the CFA franc being pegged to the euro.
The major funders insisted on the importance of strengthening the macroeconomic convergence of the 15 countries. “Macroeconomic convergence is essential”. Respecting the timetable for the implementation of the single currency will depend on the “efforts” of each country in this area, said the president of the ECOWAS Commission, Ivorian Jean-Claude Brou. “Performance in terms of macroeconomic convergence is a sine qua non” for the single currency, insisted Adama Koné, adding that it was necessary “to strengthen the mechanisms of multilateral surveillance”. A single currency “will bring a lot to our savings. This is an opportunity for integration that must be seized for African countries, because the markets are (currently) fragmented “. He said the growth of the Cédéao zone was expected at 3.4% in 2019, after 3% in 2018.
Founded in 1975, ECOWAS today comprises 15 countries with a total population of 300 million, including 180 million for Nigeria alone, the demographic and economic weight of the area, of which it accounts for about 60% of GDP. Many experts are skeptical about the announced calendar of the launch of the single currency of ECOWAS, because of the enormous economic divergences between the 15 countries, and the road still to be traveled for a harmonization.
“We are very far from the practical reality of a single currency,” said a West African financial expert interviewed by AFP on condition of anonymity. “Talking about the single currency of ECOWAS has an immediate political benefit: it puts an end to the controversy over the CFA franc,”he added. “The CFA franc is the subject of a recurrent controversy between its defenders, who emphasize its stability, and its detractors, who accuse it of being a “neo-colonialist” currency.
* Namely: Benin, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.