It was only last year that West African countries agreed on the name eco for the proposed regional currency. It was a decision that was met with so much excitement. The reason is not far-fetched. You do not really need to be an economist to understand the advantages of having a common currency. So, when, early this year, I saw renderings on the internet, my enthusiasm grew even stronger. However, more than a year since the announcement of eco—and decades since the whole plan began—we find ourselves at the brink of a fiasco.
After several delays and postponement, 2020 was projected to bring the West Africa single currency to reality. However, a number of factors have come to make it an impracticality. First of all, the convergence criteria to be met by member states of ECOWAS have been elusive for most, if not all. The main requirements include a budget deficit of not more than 3%; an average annual inflation rate of less than 10%; a public debt ratio of less than 70% of GDP. While these are big challenges for most countries, the convergence criteria are not the main threat to eco. In actual fact, eco is the biggest threat to eco.
The member states of the ECOWAS are divided predominantly between the French and English-speaking sides. Eight francophone and five anglophone, along with two lusophone countries make up the 15 member states of ECOWAS. The French speaking sides, having as an umbrella the UEMOA, all use the colonial-sustained currency, Franc CFA, which is pegged to the euro. Struggling to break the shackles of French dominance, these countries rapidly embraced the idea of eco. But, they have done so in a way that would deter other countries (the English and Portuguese speaking sides) from adopting the new currency.
Late last year, the Ivorian president, Alassane Ouattara and Emmanuel Macron, his French counterpart, with consent of other UEMOA members, all agreed to replace the CFA with eco. As it stands, the UEMOA nations are defiantly going against the original plans made under ECOWAS, and have decided to make an immediate transition from CFA to eco.
They have already put reforms in place. The Ivorian president confirmed the name change from CFA to eco; the retreat of French representatives from BCEAO (Central Bank for these countries); and that UEMOA countries will stop the 50% deposit of foreign reserves into the French Treasury. (Though, the fixed exchange rate with euro is said to be retained).
While these measures are steps in the right direction for the UEMOA nations, the rest of ECOWAS feel that Europe—and France in particular—still has considerable influence on the new system, due to the euro peg, and the fact that France remains guarantor for all UEMOA countries.
The decision of Ivory Coast and other UEMOA countries has been described by the Nigerian president, Muhammadu Buhari, as “a matter of concern”, because, “a people with whom we wish to go into a union are taking these major steps without trusting us for discussion”.
Other non-UEMOA have also expressed their displeasure at the initiative. Accra being particularly vocal about the need for a flexible exchange rate. Hence, if the French-speaking countries go ahead to change the CFA to eco without carrying the others along, then they would be adopting an eco, different from the one originally agreed upon by all of ECOWAS.
Though there’s been a delay in their plans due to the instabilities caused by COVID-19, the UEMOA countries still intend on going head with the transition. Amidst the political rivalry and lack of solidarity, it is highly unlikely that other ECOWAS countries would follow suit under the same framework. Most importantly, Nigeria and Ghana do not want France involved in any way. But, the UEMOA countries—despite their expressiveness of wanting to get away from the grip of France—still find themselves unable to abandon their dependence on Paris’ tutelage. This has caused continuous grievances, even amongst the citizens of the French-speaking countries; with many youths even describing the new provision as Ouacron: a coming together of Ouattara and Macron.
There are probably other underlying factors that could stop the realization of ECOWAS’ eco. For example, there’s fear that the provisions made under the new currency arrangement might put Nigeria’s economic hegemony at risk. Similarly, it is not unlikely that other countries do not trust Nigeria to impose her dominance on them.
However, these all point to a lack of unity. And disunity further tells the story of another deep-rooted challenge: incompetence. It is difficult to understand the fact that most African countries are reluctant to totally break free from the influence and control of their previous colonial masters. But this is to be expected when these African countries depend on them to help maintain economic stability, even if it comes with political shakiness. So, we can probably see why there is continuing dependence of UEMOA countries on France; that is if we allow incompetence as an excuse.
Nigeria and Ghana have probable reason to be wary of France’s involvement in the realization of the unified currency, no matter how well curtailed the involvement might be. Nevertheless, it is also understandable that francophone countries are not ready to completely cut ties with France, because of the relative stability that is brought by the relationship. According to John Ashbourne, quoted by CNBC, “the lack of impetus for reform is derived as much from institutional inertia and a lack of plausible alternatives as it is from French resistance”. Hence, for many African countries, there is the fear of the unknown, and they’d would rather stick with the devil they know.
But, it only leaves us in a debacle, which might be the death of eco, as dreamt up by ECOWAS. For this failure, many would point the accusing finger at the UEMOA countries for chosing to abandon the ECOWAS plan and instead take a more francocentric approach. The blame would probably stick, but we’d also miss another chance at furthering African unity. While the future of eco remains in limbo, it is imperative for African countries to try and build a future where it would be easier to side with fellow Africans whilst taking major political economic decisions.
I perceive there’s already enough grievance amongst the youth, who continue to lament the effects of neocolonialism and imperialism. But, we also realize that freedom can’t come without self-sufficiency. As long as we or our neighbours remain overly dependent on foreign aid and assistance, we should expect no regional cohesiveness, let alone continental unity.
The journey towards unity is longer than we thought. Perhaps, we are not ready to reap any rewards in form of having a common currency just yet. That’s what it looks like anyway. In the mean time, however, as we go back to the drawing board, we need to remember to help build each other up; such that no nation would have to face any dilemma as regards Africa unity. This won’t happen in a void, though, and would require heightened relationship in every other sector. Especially in the education sector, where intraregional (as well as continental) exchange of ideas abounds between African youths; where they can share innovations and build trust. The fruits of unity that we seek to reap at the top level must be planted first with the coming together of African youths. And this should happen across every socio-political sector and institution.