The launch of the ECO single currency, which had been formally adopted by the Economic Community of West African States (ECOWAS) in June 2019, has been suspended.
The ECO, which was planned for launch in 2020 by up to 15 French-speaking West African nations, will now require a new roadmap with no advanced date for the moment.
According to Muhammadu Buhari, Nigerian President and the incoming chair of the ECOWAS bloc:
“The premature adoption of the Eco by French speaking countries has unnecessarily heightened disaffection and mistrust among members of the emerging monetary union.
Bear in mind that the economic convergence criteria must be based on sound and sustainable macroeconomic fundamentals.”
President Buhari has also alluded to ‘foreign interference and so-called advice many not be in the best sub-regional interest.’ This statement is based on the fact that, despite the launch of the ECO, it is yet to de-link from the current CFA Franch from the Euro, on whose convertibility it was based.
ECOWAS comprises of 15 states and a single currency adoption would have made it the strongest economic blocs in Africa.
English speaking nations in Africa have felt that the ECO currency was a project by the French and may not have been keen to achieve common economic goals for the region as envisioned.
By going slow on adoption, ECOWAS nations are now expected to tackle some of the unresolved issues over the single currency plan that include:
- Address exchange rate mechanisms
- Stabilization fund for cushioning the changeover
- Policy harmonization to control reserves
- Reserve pooling
- Exit strategy for those who had been using different currencies
According to Buhari, African nations should be keen to provide ‘African solutions to African problems’ without ‘foreign interference and advice.’
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