The Economic Community of West African States (ECOWAS) has suspended its long-anticipated plan to implement a single currency, the ECO, after years of setbacks and struggles to bring the initiative to fruition.
The decision was disclosed by Edwin Melvin Snowe Junior, a prominent member of the ECOWAS Parliament and Co-chair of multiple joint committees within the organisation, during a recent interview with journalists in Banjul, Gambia.
The ECOWAS single currency initiative, first proposed in the late 1990s and gaining momentum in 2000 with the establishment of the West African Monetary Zone (WAMZ), aimed to create a unified currency for the 15-member regional bloc.
The ECO was envisioned as a cornerstone for economic growth and development, simplifying transactions, reducing currency exchange challenges, and fostering a more integrated and prosperous West African region.
However, the ambitious project has faced numerous obstacles, particularly political challenges, which have now led to its indefinite postponement.
According to Snowe Junior, the roadblocks are largely political rather than economic or technical.
“The single currency is a work in progress. It has its own political implications.
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“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”, Snowe Junior explained.
A significant hurdle in achieving a single currency is the need to integrate the French-speaking countries’ use of the CFA franc, which is tied to France with reserves held there, alongside the Anglophone countries.
This complex arrangement requires significant political will and negotiation.
“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,” Snowe Junior noted.
To address these challenges, ECOWAS is now considering a revised plan 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. Over the years, these two currencies could potentially merge into a single currency”, Snowe Junior said.
Despite the political instability and recent coups in some member states, which have put the focus on restoring regional security, Snowe Junior assured that the single currency initiative remains on the ECOWAS agenda.
“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,” he said.
While the ECO may be on hold for now, the idea of a unified West African currency continues to be a goal for ECOWAS, contingent on resolving political challenges and achieving greater regional stability.
