Western Africa, specifically the Economic Community of West African States, (ECOWAS) could be on the verge of a major change. Fifteen countries in the region have agreed to adopt a single currency, the Eco, as of 2020, after a thirty-year negotiation. While the adoption will not be immediate and absolute for all, the idea is for a gradual rollout that will nonetheless unify the fifteen states and allow for a united advancement of monetary policy and, it is hoped, mutual economic benefits.
The world’s only current existing unified currency, the Euro, has hardly been smooth sailing but there is no denying that it has unified much of the European continent’s monetary policy and pushed the contributing economies to a higher level. However, in that situation the participants were half developed and strong economies, and half emerging, so the currency was able to work for all. In the ECOWAS nations, the situation is arguably much different: Ghana and Nigeria are the only two truly advanced economies, and of even these two Nigeria would be expected to dominate and imbalance the arrangement. Could the Eco be a success? Certainly, it would allow members to proof themselves against shocks, and bring the strength of 15 to solve problems and create new opportunities. However, there are existential problems with the currency: only Liberia currently meets all the criteria designed to give the Eco a firm start, and there is concern that the real problem is one of diversification of industry, not of currency itself.
However, the Eco is (even if ideological form) a step forward and signifies that the Ecowas area is on track to become Africa’s most important region for trade, development and investment in the years ahead. What remains to be seen is how all the countries can cope.
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