Friday, June 19, 2026
News and Views from the Global South
ECONOMY: West Africa Moving Closer to a Common Currency
Toye Olori
- The Economic Community of West African States (ECOWAS) has put in motion programmes aimed at ensuring the take-off of its long-muted common currency, the Eco, for the sub-region.
Right now, only the French speaking countries of West Africa have a common currency, the CFA. The CFA members comprise Benin, Burkina Faso, Cote d’Ivoire, Niger, Senegal and Togo.
The English and Portuguese speaking countries of West Africa use individual national currency: Cedi in Ghana, Dalasi in The Gambia, Dollar in Liberia, Leone in Sierra Leone, Guinea Franc in Guinea, Peso in Guinea-Bissau, Escudo in Cape Verde and Naira in Nigeria.
ECOWAS Heads of State and Government, meeting at the organisation’s 22nd Summit in Lome, Togo in Dec 1999 resolved to establish a second monetary zone and currency for the non-CFA members by 2003. This would be merged with the CFA zone and currency by the year 2004, as a prerequisite for the achievement of a monetary union for the 16-ECOWAS members.
Bimbola Ogunkelu, Nigeria’s Minister for Co-operation and Integration in Africa, believes the common currency for the sub-region should take off by 2004.
He says the West African Monetary Institute, which will serve as an interim outfit to prepare the ground for the West African Central Bank, has been established in Accra, Ghana, with the appointment of Michael Oji, a Nigerian, as its Director General.
Last week, the National Sensitisation Committee (NSE), formed by Nigeria, met to harmonise the country’s budget and the modalities for creating and sustaining the national awareness programme on the new currency – Eco.
“The National Sensitisation Committee is expected to carry out enlightenment campaign to all segments of the Nigerian society, in all the 36 states of the federation, on the implications for the Government’s surrendering the autonomy of its central bank to a common central bank of the West African Monetary zone.
“The campaign also will enlighten the population on the Government’s surrendering the sovereignty of the national currency, the Naira, for a common currency – the Eco.
“It will also enlighten the population on viability of the adoption of a single monetary zone, which implies that the monetary policy for Nigeria would be fashioned by a different body outside the country and the consequences of these developments on the Nigerian Economy,” says a statement from the committee.
Nigerian economists agree that a single currency will boost intra-regional trade, enhance payments and reduce capital flight.
They, however, expressed pessimism over the feasibility of the proposed currency emerging within two years because of lack of infrastructure.
They argue that indices — like political stability and strong economy — which will make single currency work are lacking.
“The reason for the success of the Euro was because there is a good economy and political stability in Europe, indices that are lacking in Africa. If we want to be taken seriously by the world on the issue of single currency, we must first look for a way of improving the economy, not only to print notes. Money must continue to be printed only if it is backed up by reserves,” says Peter Olorunda, an economist in Lagos.
He says, “A lot of issues need to be addressed before a common currency could be considered a possibility. Unequal strength of national economies, divergent tariff structure among member countries and the problems of movement of people and goods must be addressed.”
ECOWAS members say the proposed currency will facilitate the free flow of capital within the sub-region and enhance greater inflow of foreign capital as well as assist in integrating the region into a single regional market for the over 210 million inhabitants of the community.
The proposed West African Central Bank will take off with an initial capital of 100 million U.S. dollars. Nigeria, Ghana, Sierra Leone, Liberia and Guinea each will contribute in two trances of 25 million U.S. dollars by September.
“All member states are to take the necessary steps to ensure the ratification by October 2002 by their National Parliaments of the basic agreement adopted last year on the establishment of WAMZ and the statues of the WACB,” said a recent statement by Heads of State.
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ECONOMY: West Africa Moving Closer to a Common Currency
Toye Olori
- The Economic Community of West African States (ECOWAS) has put in motion programmes aimed at ensuring the take-off of its long-muted common currency, the Eco, for the sub-region.
(more…)
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