President Muhammadu Buhari of Nigeria says West Africa’s plan to adopt a common currency – the eco – is being put at risk by some countries’ attempts to progress more quickly than the agreed timetable.
President Buhari said the move could jeopardise the common currency project.
He was particularly concerned that francophone countries such as Côte d’Ivoire and Senegal had decided to replace their currencies with the new, unified currency – the eco – before others.
“It therefore gives me an uneasy feeling that the Uémoa zone [francophone countries] now wishes to take up the eco in replacement for its CFA franc ahead of the rest of the member states,” he said.
“We cannot ridicule ourselves by entering a union to disintegrate, potentially no sooner than we enter into it.”
Buhari said Nigeria was committed to the common currency and urged leaders to take a unified position to safeguard the region.
He acknowledged that the impact of the global pandemic could make member states cautious about complying with agreed standards as economies face recession. Several West African countries rely on commodities whose prices are regulated on international markets.
Nigeria, the largest economy in West Africa, currently operates a managed float for the naira, while several other countries peg their currency to the euro.
It has been nearly two decades since the idea of a single currency for West Africa was first mooted. Yet the subregion is still far from having a common legal tender.
Now, the story is that the single currency has been scheduled for 2020 but there is scepticism about the prospects of this coming to pass.
The decision to create a single monetary zone for West Africa was reached by the heads of state of 15 member countries at a summit of the Economic Community of West African States (ECOWAS), the region’s economic commission, in Lomé, Togo in 1999.
The convergence criteria that ECOWAS set for its member countries seem to be the bane of the single currency project. Although the criteria are essential, the bars are very high for the countries involved to scale.
The ECO is supposed to boost economic development in the West Africa subregion and improve cross-border trade.