Eight Former French colonies announced earlier this year, the planned adoption of a common currency to replace the much-criticized French-backed CFA franc; the arrangement came with a package set to put an end to the exploitative 50% foreign exchange reserves kept in the French Treasury, see to the withdrawal of French representatives from the region’s currency union board among others.
The formal introduction and adoption of the currency was scheduled to close of 2020; however, the President of Ivory Coast, Alassane Ouattara has on Saturday told reporters that, the planned launching of the common currency (ECO) will not be held this year due to coronavirus and other factors.
Ouattara made this comment whilst on a visit to Bouaflé, a city in central Ivory Coast. He stated that, “We know the eco cannot be put in place this year because of COVID-19.”
The president further hinted that, the planned launching of the ECO may not happen any time soon due to a foreseeable inability of some member states to meet the required budget deficit of 3% of GDP; “We think it will be difficult to get to a 3% deficit for two or three years, so personally I don’t see the eco’s arrival for three to five years,” he said.
The declaration of ECO as the common currency for West Africa by the eight former French colonies came with a lot of controversies; West African Monetary zone convergence council, an organized body which was tasked to enforce the eligibility requirements from member states for the adoption of the proposed common currency has rejected the name ECO as the preferred name.
According to WAMZ which is made up of non-CFA zone countries such as, Nigeria, Ghana, Liberia, Sierra Leon, The Gambia and Guinea, “Mr. Ouattara’s pronouncement is not in line with Authority of Heads of States and Government of ECOWAS for the adoption of ECO as the name of an independent ECOWAS single currency.”
Apart from WAMZ as a body, President Buhari disclosed in a statement that, UEMOA’s decision to adopt the French-backed ECO as a replacement for CFA Franc ahead of other ECOWAS member states gives him an “uneasy feelings”.
The president cited the total neglect of other member states from the decision-making process purported to decide a common currency for the sub-region as basis for his position. “It is a matter of concern that a people with whom we wish to go into a union are taking major steps without trusting us for discussion,” he said.
He further added that “We cannot ridicule ourselves by entering a union to disintegrate, potentially no sooner than we enter into it. We need to be clear and unequivocal about our position regarding this process”.
President Buhari however stressed on his country’s support for a unified monetary zone but maintains such establishment must be based on the “right fundamentals” and must also “guarantee credibility, sustainability and overall regional prosperity and sovereignty”.