After years of planning and setbacks, the Economic Community of West African States (ECOWAS) has broken off its plans of a single currency, the ECO currency.
Edwin Melvin Snowe Junior, a prominent member of the ECOWAS Parliament and co-chair of multiple joint committees within the organization, made this known to the public during a recent interview with journalists in Banjul, Gambia.
What is the ECO Initiative all about?
The ECO is a single currency initiative proposed with the end goal of enacting a unified currency for the 15-member regional bloc. After first being put forward in the late 1990s, it started to gain momentum and drive in 2000 with the establishment of the West African Monetary Zone (WAMZ).
The ECO was initiated to serve as the bedrock of industrial expansion and advancement, facilitating transactions, limiting currency exchange, for a more united and growing West African region.
Reasons Behind the Suspension of the ECO Initiative
According to Snowe Junior, the challenges and hurdles the initiative is facing are mostly political rather than economic or technical. In his words, “The single currency is a work in progress. It has its own political implications.”
“There have been a lot of political situations that need to be addressed. It’s not that we don’t have competent economists or analysts to implement it”,
A critical setback in bringing to fruition, the single currency initiative, is the necessity to integrate the French-speaking countries’ use of the CFA franc, which is tied to France with reserves held there, alongside the Anglophone countries. The intricacies involved in this will demand considerable political will and negotiation.
Snowe Junior noted, “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.”
According to Snowe Junior, the ECOWAS plans to establish separate currencies for the Anglophone and Francophone countries as a step towards eventual unification.
“We propose that Nigeria, along with Ghana, Liberia, Gambia, and Sierra Leone — the five English-speaking countries — could have one currency for now.”
“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.
Over the years, these two currencies could potentially merge into a single currency.”
He went further to reassure the public that even though the focus has moved a bit away from the ECO Initiative due to political unrest and instabilities in member states, the ECO initiative would be put back on track.
“We have been more concerned with putting the region back together, resolving the security situation, and then we can put the single currency issue back on the front burner,”
Final Thoughts
While the ECO initiative comes with lots of benefits and perks for the member states, political issues have so far hindered its actualization. Would this continue to be an issue, hence, forever crippling the massive advancement the initiative would bring? Or would it be resolved soon enough to see the fruition of the ECO?
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