In their efforts to promote economic integration and harmonise trade and investment in their region, the 15 member states of the Economic Community of West African States (ECOWAS) agreed to replace their respective domestic currencies with a new one called ECO. They not only agreed on the single currency adoption but also targeted January 2020 as its expected takeoff time.
Nigeria and 15 other states in the region are expected to surrender their respective currencies for the ECO they further agreed that in giving birth to it, its exchange rate should be determined by market forces of demand and supply.
Having a single regional currency, if done properly, could, indeed, ensure economic prosperity of the nations involved, especially if there is no hidden motive enclosed therein.
If properly implemented, Nigeria no doubt could be its major beneficiary, being the strongest economy and the most populous, constituting almost two-third of the region’s 380 million people. The need not to require foreign exchange before goods and services move freely among these countries will surely lubricate its economy.
While we may be in haste to join this league looking at the aforementioned benefits, it is equally important that we ponder on some critical issues. Most countries in the region, particularly the old French colonies, are already using CFA as their currency. Then, suddenly came the announcement by the president of France, Emmanuel Macron, and his Ivorian counterpart, Alassane Ouattara, that their CFA would be renamed to ECO and be used among the former French colonies.
Of course, one needs to ask why France would be involved in the entire process. Is it a renewed attempt to further enlarge its colony to the entire region? Simply put, France by this move wants to go further to control the whole ECOWAS member states via the Eco-zone currency.
Let’s understand that these countries initially laid down some key conditions for all members joining the currency, including keeping budget deficit of all member states below three per cent of GDP, making sure that gross external reserves are worth at least three months of imports and that national debt must be kept below 70 per cent.
In the case of inflation rate, the countries agreed that inflation rate should not be more than 10 per cent, while budget deficit should not exceed 10 per cent of the previous year’s tax revenue.
Therefore, Nigeria needs to tread with caution to avoid the repercussion of being plunged into serious economic crisis. If Nigeria is to surrender its naira unconditionally, it would mean subjugating its economic independence to France. It means its economic policies will no longer be decided in Abuja but Paris. Also, given the fact that West African countries are dependent on commodity imports from the Euro-zone, prices of commodities will now be internationally regulated and externally controlled.
France has always defined itself as the main power block in Africa and so has always seen Nigeria’s self-definition as an African power as a threat to its interests. It is, therefore, surprising that Nigeria, which is the main target of this French action, is now attempting to surrender itself via its decision to abandon the naira to adopt the Fench dominated ECO.
Sani Ibrahim Paki,