So earlier this year, the 15 heads of states and governments of the Economic Community of West African States (ECOWAS) agreed to launch a new currency, the “Eco,” in January 2020. In doing so, ostensibly, the leaders believe that business people and travelers will be freed from the hassles of exchanging currencies, intra-area trade will boom, and an integrated and prosperous region will flourish.
A monetary union with a single currency for the 15 member states would mean that governments would transfer national political authority to ECOWAS institutions. Are the member states willing to subordinate national interests to regional interests? Are there lessons from the eurozone? Will Nigeria ever give up its national currency, the naira? These are some questions I asked myself.
Well, it turns out that The federal Republic of Nigeria will indeed be adopting the new currency come January 2020. Am a little skeptical though about the outcome of this new currency. I have lot of questions playing in my head and a lot of thoughts about it. Will the old currency be banned? How soon will Nigerians be given before they will no longer be allowed to use the old currency? Because January is just a few weeks away and I don’t know how quick the old currency can be withdrawn from circulation.
These are fundamental questions. There are also lessons to be learned. In this day and age, national sovereignty is all the rage and seems to trump cross-border collaboration. Certainly, flaws of an integrating world are evident but so are those of their populist detractors.
Here’s are some benefits of the new currency. The Eco is supposed to boost economic development in the West African region and improve cross border trade. If implemented, countries across the region will be able to move and spend money across different countries without worrying about exchange rate costs says economic. The single currency will also help to address the region's monetary problems like the difficulty in converting some of its currencies and the lack of independence of central banks.
The ECOWAS policymakers will do well to heed to some lessons. First, leaders must be absolutely clear about the expected benefits of the single currency. Second, a fiscal pool is important for crises response and for an effective monetary union. Third, public opinion matters. The decisions by the Danes, Swedes, and Brits to retain their national currencies came largely under public pressure opposed to the euro. Even today, the U.K.’s battle around Brexit illustrates the dangers of taking public opinion for granted. It would thus be naïve for the ECOWAS leaders to march full steam ahead in their quest for a single currency on the erroneous belief that the Eco is Good for West Africa.
In case you didn’t follow all the jargon I wrote, here’s a sum up. West African countries will adopt the Eco currency when it will be released. These countries are Benin, Burkina Faso, Cabo Verde (Cape Verde), Côte d’Ivoire (Ivory Coast), The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Saint Helena, Senegal, Sierra Leone and Togo.
With the adoption of the Eco next year, French speaking West African countries will ditch the CFA Franc, known as “Colonies Francaises d’Afrique,” which was established in 1945 and pegged to the Euro since 1999. The official symbol for the Eco will be ‘Ec’. According to reports, the Eco notes will feature great African legends and showcase features of West Africa.
The official bank for the sub-region’s currency will be known as the Central Bank of West Africa (CBWA).There is no official value for the Eco currency yet and no specific date has been given for the launch of this new currency but from speculation, in January, 2020 the single currency will be launched for the above named West African Countries.
We look and watch out as January is just some day left, and hope this change things around.
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