By Adedapo Adesanya
The Economic Community of West African States (ECOWAS) is planning to halt its single currency initiative – ECO – after years of struggles to actualise the plan.
Previously, the currency was expected to be launched in 2020 but has faced several pushbacks, including the COVID-19 pandemic and had to be suspended the plan in 2021, with the bloc saying it was looking at 2022 to 2026 to create conditions that will enable it to stabilise the economies.
A feasible date of 2027 was previously reported but that may not be the case anymore, according to a statement by Mr Edwin Melvin Snowe Junior, Co-chair of the ECOWAS joint committees on Social Affairs, Gender and Women Empowerment, Legal Affairs and Human Rights, Political Affairs, Peace, Security and African Peer Review Mechanism (MAEP), Legal and Human Rights, Trade Customs and Free Movement, in Banjul, Gambia at the weekend.
The ECOWAS single currency initiative was first proposed in the late 1990s and the idea gained more attention in 2000 when the West African Monetary Zone (WAMZ) was established to work towards creating a single currency for the region.
The Eco was envisioned to become a cornerstone of economic growth and development for the 15 member states of ECOWAS, as it is expected to simplify transactions, reduce the hassle of currency exchange, and promote a more integrated and prosperous West African region.
However, the initiative has hit a rock and seems to be dead following some political challenges.
Speaking on the struggles in actualising the single currency initiative, MP Snowe Junior said there had been some political challenges.
“The single currency is a work in progress. It has its political implications. There has been a lot of political situation that has to be addressed. It’s not that we don’t have good economists or analysts who can understand and implement it.
“We have had little or less problems from the English-speaking zone but because we have the French CFA with the reserve in France and then you have the BCEAO bank as another federal bank for the French-speaking country, we have to integrate the currency.
“So, it still needs a lot of political will and that is why the last three countries that had coup d’état are talking about changing their currencies because their reserve is in France and not in West Africa or Africa.”
He said the regional bloc was now proposing a single currency for the Anglophone countries and another one for the Francophone countries in the region as a replacement for Eco.
“That is why sometimes we propose that Nigeria, which is the hub of our region, in addition to Ghana, Liberia, Gambia and Sierra Leone, that is the five English-speaking countries, could have one currency for now,” he said.
“Then, the Francophone countries could have another currency. Then you can ask Guinea Bissau and Cape Verde to join either the Francophone or Anglophone so that we have two currencies for now.
“And then, over the years, those two currencies can migrate into a single currency.”
He said political instability in the region had halted the consideration of the proposals of two currencies for the region but assured that focus would be shifted back to the issue as soon as possible.
“We have been more concerned with putting the region back together, resolving the security situation in the region and then we can put back the single currency issue on the front burner,” he said.