Nigeria Needs Caution Before Joining Monetary Union Of ECOWAS, ECO Currency

By AG Mukhtar

The Economic Community of West African States (ECOWAS) which comprises the 15 member States from both the Francophone and Anglophone speaking countries was established as a political and economic union to promote the economic integration of the member states of West Africa. It also serves as a peacekeeping force in the region.

ECOWAS has fifteen member States eight of which are French-speaking countries which include Benin Republic, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo. All of these countries are former colonies of France and the currency they all use is CFA Franc (The Currency Of France).

Before the issue of eco currency started, those French West African countries developed the idea of creating west African economic and monetary union in order to counterweight the dominance of English Speaking economies like Nigeria and Ghana within the ECOWAS.

Since then Nigeria and its other friends of English speaking countries went through a move to established West African Monetary Zone (WAMZ) which plans to work toward adopting their own currency named, Eco. After its introduction, eco currency then aimed to replace the West African CFA franc (used by most French-speaking members of ECOWAS with the new currency whereby it will create a common stable single currency for much of West Africa.

The single currency would have been good for international trade, cross border trade to promote economic development within the West Africa sub-region and Africa as a whole,  the currency had long been a debatable issue for over 30 years struggles by the 15 ECOWAS member States but the currency was delayed to be officially launched because of the failure and the inability of the 15 ECOWAS countries to meet the convergence criteria and conditions they set for themselves for almost 20 years.

The problem now is that after failing to meet the convergence criteria, French President Emmanuel Macron announced that the eight countries colonized by France that are using CFA Franc currency would adopt the Eco as their new currency in this year 2020 and he made this announcement without meeting them, also the announcement was made the day ECOWAS was having a meeting for a final adoption of Eco in 2020. France made this decision in order to take over the responsibility of establishing and printing the new currency and to set up conditions for the eight French-speaking countries because it has total control over their economic affairs.

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France was trying to change everything for a political reason because it now wants to destroy the over 20 years movement of establishing regional currency to boost international trade and economic development, and it also want to break up everything in regard to eco currency by not allowing the 15 ECOWAS members States to meet up their conditions and convergence criteria they set up for themselves because it does not want to lose its total political and economic power on the colonies it still has control over (The Eight French Speaking Countries)

By implication, Nigeria will not accept the conditionalities set up by France because it is not a colony of France, it is an independent state, not only that for any English speaking countries to join the monetary union it must accept the conditions developed by France. How do you think Nigeria Can join?

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As  Nigeria received the news of the change of CFA Franc by some francophone West African countries, it should carefully study the situation before it responds and it should not rush to adopt the Eco currency because  many of the ECOWAS countries had yet to meet the convergence criteria and the conditions they set for themselves

Nigeria should be very careful to understand that those francophone countries have already been in the monetary Union of France since they are still using CFA Franc as their official currency and they can easily meet up any criteria being set up.

Despite the huge advantages the Eco currency has in facilitating international trade and economic development, Nigeria should be cautious before entering the Monterey union.

Nigeria should be very cautious in studying the situation before it join the monetary union so that we will not just go into a deal that will affect us as most of the African countries are relying on Nigeria to boost their economies and should also study the situation from the political perspectives not only the economic advantages or otherwise.

AG Mukhtar, a graduate of Economics, Bayero University, Kano, can be reached via agarbamukhtar@gmail.com or 07060716694