B&FT Editorial: WAEMU's usurpation of the Eco not procedural

ECOWAS as a region has a programme to adopt a common currency called the Eco - which speedy should have been adopted in July this year after several missed in the past.

However, when Ivory Coast's President Alhassan Ouatara announced recently that "in agreement with the West African Economic and Monetary Union Head of State, we have decided to reform the CFA franc with the following three major changes: first, the name-change of the currency from the CFA franc to the Eco...", the dynamic changed for the worse.

The launch of the 'Eco' has stocked divisions with the five Anglophone countries in the 15-member Economic Community of West African States (ECOWAS) which want to adopt the new currency on a slower timetable - and as a new currency for the whole region, not just as a replacement for the CFA franc.

The Anglophone nations of Nigeria, Gambia, Ghana, Liberia and Sierra Leone, along with Guinea, issued a communique condemning the WAEMU decision to unilaterally rename the CFA franc as the Eco.

A joint communique issued by the West Africa Monetary Zone )WAMZ) Convergence Council, minus Portuguese-speaking Cape-Verde, condemned the unilateral WAEMU decision to launch the Eco as a rebrand of the CFA franc.

ECOWAS members wanting to join the Eco are required to meet four basic criteria: a single digit inflation rate at the end of each year; a fiscal deposit of no more than 4% of the GDP; a central bank deficit-financing of no more than 10% of the previous year's tax revenue; and Gross external reserves which can give import cover for a minimum of three months.

To be honest, since several ECOWAS members are no way close to meeting the convergence criteria, it would not be possible to adopt the eco under the present circumstances; and Ivory Coast's unilateral announcement of the Eco adoption from the CFA franc will by all means cause some consternation.

WAEMU consists of Benin, Burkina Faso, Guinea-Bissau, Cote d'Ivoire, Mali, Niger,Senegal and Togo - all of which are former French colonies except for Guinea-Bissau, which gained independence from Portugal in 1973.

WAEMU and cote d'Ivoire President Alhassan Ouatara and French President Emmanuel Macronannounced last month that the CFA franc, which had been in place since 1945, would be renamed and subjected to a host of reforms.

This explains the sudden adoption of the Eco by Ouatara, and it is appropriate that the Convergence Council of WAMZ acted swiftly to allay fears. Indeed, we welcome all West Africans to adopt a single currency that will arguer well for regional trade - but it mus follow prescribed channels and not just a unilateral announcement prompted by a still-colonial power that wields far too much influence in Africa.