Two years after the botch of its earlier scheduled launch, the Economic Community of West African States (ECOWAS) Commission, said it has set a new date for the launch of the bloc’s single currency Eco.
In June 2019, the Authority of ECOWAS Heads of States and Government agreed, during its Extraordinary Session in Abuja, to have a single currency and adopted the name Eco, though the idea of a single currency was conceived back in 2003. The currency was expected to be launched in 2020.
Now NAN reports that Mr. Jean-Claude Brou, the President of ECOWAS Commission, has said that the community has resumed convergence to launch the ECOWAS single currency in 2027. It’s more of a reiteration of the bloc’s decision last year.
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Brou made this known on Tuesday while delivering reports of the ECOWAS Commission before the ECOWAS Parliament during the ongoing 2022 First Ordinary Session of the Parliament in Abuja.
Brou said that the process of launching the single currency was stalled following the outbreak of the COVID-19 Pandemic from 2020, as countries needed to focus on handling the pandemic.
He explained that the convergence criteria had to be thorough so that the currency once implemented will serve the citizens effectively.
We had to suspend that in 2022, 2021. We are looking at 2022 to 2026 to be able to create conditions that will enable us to stabilise the economies.
“And so, 2027 we go back to the currency. The process of the performance criteria is always prioritized if we want to be in a very favorable condition to introduce the single currency.
Because you can introduce the currency but what is required is that it should be of quality.
“In other words, it should serve the needs of the population and also should inspire confidence and trust in in the population.
So that is the main objective, to ensure that the convergence criteria is been followed,” Brou said.
Rep. Awaji Abiante, Member of the ECOWAS Parliament and Nigerian lawmaker representing Andoni-Opobi/Nkoro Federal Constituency of Rivers, said that the delay in the launch of the currency is to avoid any form of crisis.
Speaking to journalists on the sideline of the session, Abiante said that the single currency is work in progress and there is hope that sometimes it will work.
“Every good thing comes with its challenges so getting the economies of the 15 member states to agree on that transaction and how it can be moved forward.
“If it is hurried, definitely it could run into crisis so it is good to have every aspect of it discussed, agreement reached, such that it will be implementable,” Abiante said.
On the sustainability and benefits of the currency, Abiante said that until it is implemented, one cannot say how viable it would be.
“Whatever anybody says, it is just going to be mere projections, it is only when it is implemented that you will see the benefits.
“But simply put, it will ease transactions, it will open up the economies, it will make it freer for people to engage in both commercial and industrial activities,” he said.
However, concern has remained about the sustainability of a single currency in a bloc that has failed to live up to its intra-trade and integration obligations. The 15 members of Ecowas; Benin, Burkina Faso, Cabo Verde, Cote d’Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo, have failed to settle their differences to promote growth in the region.
For instance, in 2019, Nigeria, Africa’s largest economy, shut its land borders and banned importation of food items from neighboring countries. The border closure, which lasted for nearly a year, greatly limited import and export of goods and services from Nigeria to other ECOWAS states. It was a bold breach of the ECOWAS charter and stood against the idea of African Continental Free Trade Area Area (AfCFTA).
In another case that has lingered for years, the Ghana Traders Association, backed by the government, launched an attack on Nigerian traders doing business in Ghana, asking them to leave or pay as much as $1 million in trade permit fees.
But besides these unending issues that keep making mockery of everything that ECOWAS is supposed to stand for is another concern – France, Nigeria and by extension Eco being pegged to euro.
France’s influence on the eight Francophone members of the ECOWAS has been a concern to their Anglophone counterparts. CFA Franc, the common currency of Francophone countries is heavily tied to France, who is using it to wield colonial influence in Africa that any move to launch the Eco without dismantling the status quo, will mean putting the Anglophone countries under France’s monetary influence.
To exert the monetary independence of the single currency idea, monetary convergence, the foundation stone of Eco, requires the French-speaking members of ECOWAS to untie their monetary framework from that of France, to enable a merger of CFA Franc and Eco. This is necessary because; the Central Bank of West African States (BCEAO), the central bank that is managing the currency of the eight countries of the West African Economic and Monetary Union that use the CFA franc, and would likely serve as the central bank for the Eco, is depositing half of its exchange reserves with the Public Treasury of France.
French President Emmanuel Macron, who had promised to dismantle France’s old legacy in Africa and establish a new relationship that will respect modern (anticolonial) sentiment, changed his tone recently following the move by French-speaking West African countries to untie themselves from CFA Franc.
“In May 2020, Paris kicked and started the official process leading to the replacement of the 77-year-old CFA franc with Eco, a French version of the ECOWAS initiative, meant to serve as the West African Economic and Monetary Union (WAEMU also known as UEMOA), founded by Senegal, Côte d’Ivoire, Burkina Faso, Mali, Benin, Togo, and Niger, as an arm of ECOWAS that advances the cause of the Francophone West African countries,” a report by the Guardian Magazine noted.
The monetary convergence requires that the monetary agreement bound France to its former colonies in West Africa be dismantled not replaced. Thus, France’s recent turnaround from its promise to establish a new agreement that will end its 77-year old monetary legacy in Francophone West Africa, becomes a new challenge to the launch of Eco.
Not charting a new independent monetary path will only mean a transition of France’s imperialism through the Eco, which will be pegged to the euro, and backed by the French Treasury. The euro will guarantee the Eco’s convertibility and stability, with the treasury remaining as guarantor for all eight WAEMU countries. It is a development that the English-speaking members of the ECOWAS do not want to align with. Ghana and Nigeria had in 2020 condemned the idea, the Ghanaian government saying that it would only ditch its troubled cedi for the sub-regional currency if it was de-pegged from the euro.
On the other hand, other internal issues between ECOWAS member states remain to be resolved. For instance, Nigeria, the most populated country and the largest economy in the bloc controls over 60% of the sub-region’s economy, which has given the country’s currency the naira a sense of sovereignty over the years. Accepting the sub-region’s single currency will mean that the naira will lose its status in the region – and that’s a development that Nigeria doesn’t seem willing to accept, as it has demonstrated by its lack of leadership commitment to the Eco goal.