Abuja: The West African countries that form a 15 member group, have decided to use a single currency dubbed as ‘ECO’, to enhance trade and economic cooperation in the region and declared the currency would come into effect from the year 2020. The move is a significant step by the African nations, at a time when the world is faced with challenges like the trade war and global recession.
In 1975, West African nations formed the 15-member group called the ‘Economic Community of West African States’ (ECOWAS). The group incorporates the countries of Nigeria, Mali, Burkina Faso, Ivory Coast, Togo, Niger, Guinea, Sierra Leone, Gambia, Senegal, Benin, Ghana, Liberia, Guinea Bissau and Cape Verde as the member states.
Under the bloc, two independent groups, namely, the Economic and Monetary Union and the Monetary Zone, were formed. ECOWAS aimed to boost economic development with the creation of a free trade area and a single currency. Also, eight members of the group have already started using a common currency called the ‘CFA Franc’, and ECO was the next stage.
However, with the rise of successive killer epidemics, influence and attacks of the terrorist organisations, ethnic conflicts, violence and political instability, the decision on the name of the single currency and its implementation, could not be sealed. In a report ECOWAS published last year, preparations for the single currency were focussed upon while raising the issue of enhancing the regional trade. Subsequently, after a series of meetings and deliberation on the matter, the member countries of ECOWAS finally concurred on the name and possible timeline for the implementation of the new currency at the summit in Abuja.
ECOWAS extends to 15 countries, over more than 5.1 million square kilometres, reaches out to a population of nearly 390 million and an economy worth $1.48 trillion. Nevertheless, political instability and cross-border ethnic conflicts have already slowed down the economic growth rates in the West African countries. Moreover, given the natural calamities and prevalent social problems, the local governments, as well as the international groups, have not been able to provide the required impetus to the trade in the region.
Given the circumstances, the steps taken by the West African countries towards forming a single currency while maintaining cooperation, is considered significant. Along with the West African countries, Southeast Asian countries, that are members of the ASEAN group, are also working towards a common currency. On the other hand, the Euro, which was introduced as a common currency of the European countries, is facing various issues. Additionally, the European Union (EU) member nations themselves have blamed their economic problems on the Euro.