Debate over implementation of single currency for West Africa-Don’t fix ECO to Euro … Govt tells 8-member UEMOA countries

Government has raised concerns over the decision by the Monetary Union of West Africa (UEMOA) to fix the new ECO currency to the Euro.

The eight-member states of UEMOA, late last year, announced their decision to replace the CFA Franc with the new Eco currency beginning this year.

Although the government says it is “determined to do whatever it can to join the eight countries using the Eco”, it does not want the currency to be fixed to the Euro. 

It is rather advocating for a flexible exchange rate regime to allow the currency to perform based on its demand and supply. 

However, government has not yet stated in clear terms that adopting a flexible currency would be a condition to be met before Ghana would adopt the currency. 

Ghana, Nigeria, The Gambia, Guinea, Liberia, Cape Verde, and Sierra Leone are not members of UEMOA, and therefore, not part of the CFA Franc monetary union.

They are yet to take a decision on the Eco, although all ECOWAS members have expressed their commitment to use the single currency.

A statement from the Communications Bureau at the Office of the President expressed the government’s support for the Eco currency and urged six other West African countries to do same. 

The government has, as part of its foreign policy, been championing for regional integration and adoption of a common currency. 

“We believe the new currency will help remove trade and monetary barriers, reduce transaction costs, boost economic activity and raise the living standards of our people,” the statement said.

The government, however, appealed to other ECOWAS nations to work rapidly towards achieving its common-currency plans through the ECO. 

The statement called for the institution of a federal system for the ECOWAS Central Bank, and other related agreed convergence criteria, to achieve the single currency objectives.

Source: Ghanaian Times