The International Monetary Fund (IMF) said it is ready to engage with the West African authorities and to support the implementation of the planned new currency called the Eco.
Kristalina Georgieva, managing director of the IMF, in December 21, 2019 issued a statement on the reform of the West African Economic and Monetary Union (WAEMU)’s CFA franc framework.
She said, “I welcome the reforms to the WAEMU’s CFA franc currency arrangement that were announced by Presidents Ouattara and Macron in Abidjan. They constitute a key step in the modernization of long-standing arrangements between the West African Economic and Monetary Union and France.
Georgieva said the announced measures build on WAEMU’s proven track record in the conduct of monetary policy and external reserve management. In recent years, the WAEMU has recorded low inflation and high economic growth, the fiscal situation has improved, and the level of foreign exchange reserves has increased.
The reforms also maintain key elements of stability that have served the region well, including the fixed exchange rate with the euro and the guarantee of unlimited convertibility provided by France, she said.
“The IMF stands ready to engage with the regional authorities, as needed, and to support the implementation of this important initiative.”
However, Zainab Ahmed, Minister of Finance, Budget and National Planning, sees the possibility of establishing a common economic block and adopting a single currency- being proposed as the ‘Eco’ – by the Economic Community of West African States (ECOWAS) Member countries as uncertain.
The uncertainty stems from the inability of member states to meet a set of convergence criteria before the Monetary Union can be established.
To achieve a common monetary integration programme required each member country to comply with a set of four primary and six secondary convergence criteria to ensure a stable macroeconomic environment.
