Leaders of the Economic Community of West African States (ECOWAS) have showed strong commitment in issuing the regional bloc’s own currency known as ‘Eco’ by end of 2020.
This comes after leaders of the 15 member states which make up the ECOWAS met in Abuja, Nigeria, to
advance discussions on a project that has gathered dust on the shelves for nearly 30 years now.
Proponents of the Eco—which will ensure a single currency for all member states— argue it will
facilitate trade and strengthen West African economies against major trading currencies like the U.S
dollar and the British pound.
It is understood that the implementation of the new currency will take a gradual approach starting with
countries that meet the convergence criteria outlined by ECOWAS.
The four primary convergence criteria needed from each member state for the implementation of the
single currency are; a single-digit inflation rate at the end of each year, a fiscal deficit of no more than 4
percent of the GDP, a central bank deficit-financing of no more than 10 percent of the previous year’s
tax revenues and gross external reserves that can give import cover for a minimum of three months.
Eight of the countries which make up ECOWAS–Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali,
Niger, Senegal, and Togo – currently use the CFA franc, the other seven ECOWAS countries use their
own currencies. The Francophone countries have shared the CFA franc since the colonial times which
ties them to France.
ECOWAS was set up in 1975 and comprises Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea,
Guinea-Bissau, Ivory Coast, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo –– making a
total population of around 385 million.
As the African Union is preparing to kick start the African Continental Free Trade Area (AfCFTA)
Agreement, West African states would be major beneficiaries with their single currency in the single
largest market in the world.