The issue could not be more confusing – five Anglophone countries of West Africa plus Guinea rejecting the use of the Eco as a single currency to replace the CFA francs by their Francophone counterparts apparently without their consent.
Member countries of the West African Monetary Zone, namely Nigeria, Ghana, Liberia, Sierra Leone, Guinea and The Gambia recently condemned what they called the unilateral declaration by the French-speaking members of the Economic Community of West African States that the Eco currency will supplant the CFA later this year.
Since the news broke that the eight countries of Francophone West Africa will early this year swap the CFA for the Eco, questions have been asked about what happened to the other common currency agenda by the same Eco name which began to be hatched in the early 2000s.
Several theories have spawned from some quarters about the implications for this major shift from CFA to the Eco by the eight members of the West African Monetary Union (UEMOA), namely Senegal, Guinea Bissau, Niger, Mali, Cote d’Ivoire, Benin, Togo and Burkina Faso.
Others are pointing to a polarised common currency initiative, bearing the same name, one piloted by the six countries for a common currency and the other 16 years later by the eight mostly French-speaking members of the regional grouping.
Since the idea of a common currency for the six nations was broached in 2003, the date for its introduction has been postponed or shifted at least five times (including in 2005, 2010 and 2014), apparently stuck over the convergence criteria set by the West African Monetary Institute which were not met by member states.
These requirements include a below 10 percent inflation rate, a budget deficit of less than 3 percent and a debt worth valued at below 70 percent of national GDPs.
After the announcement was made in Abidjan last month by Ivorian president Alassane Ouattara that nations making up the UEMOA zone would unilaterally introduce a replacement to the CFA franc, a currency in existence since 1945, many cast their attention to the reaction of the regional grouping Ecowas or the six countries which were synonymous with the Eco until the French-speaking nations got in on the act.
Is this not a case of West Africa witnessing two monetary zones sharing the same Eco name for parallel denominations?
However, in the opinion of Momodou Dibba, a fiscal expert working with the Central Bank of The Gambia, the idea that this new common currency project will be exclusively for French-speaking nations of the region is slightly misleading if not downright wrong.
Dibba tells the African Press Agency that this idea about a common currency for the region’s 15 countries was and still remains a regional project being championed by the Economic Community of West African States.
However, it appears that Francophone West Africa are running away with the idea of a common currency project, leaving their English-speaking neighbours behind but Dibba says if this were true it would still make a lot of sense given that the French-speaking nations are already in a working monetary zone that has been operating for many decades.
The striking fact that none of Ecowas’ English-speaking members who have their own currencies are part of this new Eco common currency project as announced by Ivorian president Alassane Ouattara has nonetheless left many observers baffled.
Eco as the proposed name of a future common currency for the region’s 15 countries was until recently not patented.
However, an expert opinion from an official with the West African Monetary Institute (WAMI) who wishes to remain anonymous suggest that this can only be a loose parochial arrangement which is slightly more than a symbolic change of name from CFA to Eco.
He said some progress has been made since the idea of a common currency to replace the CFA was first floated to some tangible steps to bring it into fruition after years of filibustering by the six original members of the Eco currency scheme.
“The Eco will inherit some blessings from the CFA, one of which will be the fixed exchange rate, and this arrangement would not cause any shocks to the eight economies concerned” he added.
He said some difficult questions remain however, especially when the bigger picture comes into play, conspicuous among them on whether France which still controls the reserves of the CFA francs member nations, will provide access to their remaining reserves without interest.
While campaigners against the continued use of the CFA francs may celebrate this as victory over “a shameful relic of Africa’s colonial bondage” by France, some economic pundits believe there are still lingering fears that the status quo would remain the same unless tangential issues including fiscal security are resolved.
But according to them, the good thing about this change from CFA to the Eco is that it feels less about France holding all the aces for the fiscal stability of the economies in the UEMOA zone although the new currency if it goes into circulation in early 2020 will be pegged to the Euro just like its old forerunner.
“They have yielded to the popular opinion of their peoples and it’s also taking on a regional character” one local Gambian economist says.
WAMZ members have since called for a meeting of Ecowas member countries to thrash out the details.
The UEMOA countries have not responded officially to the position of the WAMZ members or their call for an Ecowas-sponsored meeting over the Eco.
Meanwhile if it comes into fruition, to many the Eco will still feel like an unfinished business as long as big brother Nigeria, Africa’s economic giant which accounts for 60 percent of the total reserves in West Africa and about 70 percent of the region’s GDP is missing from the jigsaw.
WN/as/APA