Ghana promises to join West African neighbours in using new Eco currency

Ghana’s government has given the clearest indication yet that the country is determined to join the West African Economic and Monetary Union (UEMOA) in using the Eco currency.

In a press release on Saturday, the government commended the eight West African countries that broke from the France-backed CFA franc zone to use the Eco from 2020.

Ghana said the decision by the UEMOA will help remove trade and monetary barriers and reduce transaction costs.

This will, in turn, boost economic activities and raise standards of living for peoples in the countries involved.

The statement also talked up the establishment of the Eco currency as a “historic opportunity” for Ghana and other West African states.

“We, in Ghana, are determined to do whatever we can to enable us join the Member States of UEMOA, soon, in the use of the ECO…” the Ghanaian presidency promised.

But the country was also cautious about how the Eco’s founding countries have pegged the currency against the dollar.

“Ghana urges the other Member States of ECOWAS to work rapidly towards implementing the decisions of the Authorities of ECOWAS, including adopting a flexible exchange rate regime, instituting a federal system for the ECOWAS Central Bank, and other related agreed convergence criteria, to ensure that we achieve the single currency objectives of ECOWAS, as soon as possible, for all Member States,” the statement added.

The pegging of the Eco to the fortunes of the Euro has disappointed even some who were in support of the West African states tearing away from the CFA franc.

The phenomenon has been described in some harsh terms with some dismissing it as economic imperialism.

The history of the Eco is a two-decade-long journey that was first proposed in December 2000. Initially, the West African Monetary Zone (WAMZ) countries were originally planned to use the currency.

These countries were Ghana, Gambia, Guinea, Nigeria, Liberia and Sierra Leone. None of these countries are in the CFA franc zone.

After postponing the introduction of the currency some two times in 2003 and 2005, an agreement was established in 2009 to work towards a plan that would see CFA franc users in West Africa jump onto the Eco bandwagon by 2020.

Now, it is those in West Africa’s CFA franc zone who are in line to start using the Eco. These are Benin, Burkina Faso, Guinea Bissau, Ivory Coast, Mali, Niger, Senegal and Togo.

If they are joined by Ghana, the country will be the biggest economy in the UEMOA zone ahead of Ivory Coast. Nigeria is West Africa and Africa’s biggest economy.