By Chris Zumani Zimba
On 30th June, 2019, political leaders of the Economic Community of West African States (ECOWAS) officially adopted the name ‘ECO’ for a planned single currency to be used in their region by 2020. As part of its plans to make Africa a more integrated continent, the 15-member group announced the name at the end of an ECOWAS summit in Abuja, Nigeria’s capital last Saturday1.
While six member countries, including Nigeria, Liberia, and Ghana, could be swapping their currencies for a new one – the ECO, eight ECOWAS countries (Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo) currently jointly use the CFA franc2. This is one of the key and unique strength for ECOWAS as most of its member states are already used to the idea and practice of having a common single currency.
According to CNN, ECOWAS will be working with the West African Monetary Agency (WAMA), the West Africa Monetary Institute (WAMI) and central banks to speed up the implementation of a new road map for the proposed single trade currency3.
Although many analysts believe and commend this development on the premise that ECO is supposed to boost economic development in the West African region and improve cross border trade if properly implemented, others are still skeptical and worried about the lack of integration policies among member countries in the region to facilitate such plans.
In a similar fashion, the Southern African Development Community (SADC) resolved in 2005 to start preparing for the final step in the process of deepening regional economic integration within the sub region by implementation of a Single Currency, which was to establish the region as an Economic Union by 2018 as the target year4. Formed in 1980, SADC is political and economic intergovernmental institution that provides a framework for regional integration in the southern region5. It has a membership of 16 states, namely; Angola, Botswana, Comoros, Democratic Republic of Congo (DRC), Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe.
Given that this is 2019 going into 2020, we can only conclude that while ECOWAS has reaffirmed and adopted ‘ECO’ to be operationalized as their common currency next year, SADC is standing afar and watching from a distance with interest or following their counterparts’ progress with envy. Originally intended to be launched in 2000, the ‘ECO’ common currency for ECOWAS has been postponed multiple times, with 2020 being the newest target date. This is where SADC’s initial target of adopting ‘a yet be named common currency’ by 2018 becomes relatively better and within pragmatically feasible and achievable range retrospectively. It also confirms that, while the idea of committing to adopt a common currency sounds beautiful and commendable, the practicality of operationalizing it presents multiple economic, social, technological and political challenges. While the European Union and its ‘EURO’ remains a model for many regional economic communities (RECs)6, the case of ‘ECO’ for ECOWAS will now be an open book for Africans to read.
Chris Zumani Zimba is a prolific Zambian Political Scientist, Policy Analyst, Author, Blogger, PhD Scholar, Researcher, Consultant, Public Health and Tobacco Control Advocate. So far, he has authored more than 10 political and academic books as well as published over 100 well researched articles. Chriszumanizimba.firstname.lastname@example.org or email@example.com; +260 973 153 815 for calls or WhatsApp. This article is made possible by Centre for Multiple Democracies, Good Governance and Peace (MDGGP) under Chrizzima Democracy University (CDU). But the views are attributed to the author and not CDU.
- Business Dictionary, (2019:1), “ECOWAS” accessed from http://www.businessdictionary.com/definition/Economic-Community-of-West-African-States-ECOWAS.html
- Ranker, (2019:1), “CFA FRANC WEST AFRICAN NATIONS” accessed from https://www.ranker.com/list/west-african-cfa-franc-nations-using-this-currency/reference
- CNN, (2019:1), “ECOWAS Single Trade Currency” accessed from https://edition.cnn.com/2019/07/01/africa/single-trade-currency-ecowas/index.html
- SADC, (2019:1), “The 2005-2020 Regional Indicative Strategic Development Plan”, accessed from (RISDP) accessed from https://www.sadc.int/about-sadc/overview/strategic-pl/regional-indicative-strategic-development-plan/
- SADC, (2019:1), “SADC Frequently asked questions”, accessed from https://www.sadc.int/media-centre/frequently-asked-questions