Author Topic: West African countries to launch common currency  (Read 470 times)

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Offline eurocoin

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West African countries to launch common currency
« on: November 19, 2017, 08:01:55 PM »
Nana Addo joins West African leaders for new currency by 2020

Ghana will soon be changing its currency as it joins the rest of West Africa to fast track moves to achieve a common currency by 2020.

This was after leaders of the Presidential Task Force on common currency for the West African Monetary Zone (WAMZ) converged on the capital of Niger with the agenda of quickening the process of achieving this goal.

The outcome of this crucial meeting resulted in a communique which “instructed the Ministerial committee to meet within three months to propose a new road map to accelerate the creation of the single currency by 2020.

In this framework, a gradual approach can be undertaken, where a few countries, which are ready, can start the monetary union, whilst the other countries join later.”

The fight for a single currency has lingered on since 2013 but a special summit appointed presidents of Ghana and Niger to handle the coming on board of this single currency in West Africa.

West Africa is adopting a single currency in the next 3 years as part of moves to achieve a strong and singular trade facilitation regime. It also forms part of efforts to present the whole of West Africa as an economic regional force in Africa and the rest of the world.

Offline eurocoin

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Re: West African countries to launch common currency
« Reply #1 on: November 19, 2017, 08:05:38 PM »
ECOWAS single currency impossible without Nigeria, says UNECA boss

The United Nations Economic Commission for Africa (ECA) has said that the economic performance of Nigeria remains crucial in realising the dream of a single currency in the West African region.

Mr. Dimitri Sanga, Director of the Sub-Regional Office for West Africa of the United Nations Economic Commission for Africa (SRO/WA-ECA) made this disclosure on the sidelines of the meeting to establish a network of economic journalists for West Africa, in Dakar, Senegal.

Sanga noted that Nigeria constitutes about 75% of the GDP of the West African sub region, with a population of 180 million, and would play a significant role in facilitating the process of achieving a single currency for the sub-region.

According to him, “people are saying why don’t we move directly to the currency of the most powerful country in the zone.  Because as you know the currency is determined by the forces between the exports and imports that you have.
 
He then noted that “when you look at the economy of Nigeria, Nigeria represents more than 75 per cent of the GDP of West Africa. That means that whatever the situation, if we come up with the common currency, the macroeconomic stability of Nigeria is key to the common currency goal of the ECOWAS.”

He said that the ECA as the “Think Tank” of Africa has been tasked to find out what it would take to accelerate the Economic Community of West African Countries (ECOWAS) single currency dream. He said the report will be released soon.

“Our study will advise Head of States of ECOWAS on how to go about this. Our study is saying these bottlenecks can be addressed depending on the political willingness of the Heads of States.

“Some of the bottlenecks right now have to do with the fact that the CFA zones, are very comfortable with the single currency trading among themselves, pegged to the Euro making it easy to trade with Europe.”

Sanga said that right now the region had agreed that some basic macroeconomic criteria would have to be met before the countries make the big leaps towards collapsing their economies.

“In our studies, we went as far as looking at what Europe went through and how they came out with the Euro together. Actually they did not start by respecting all convergence criteria before coming up with the common currency.”
 
The UNECA Director also advised African countries to learn from Nigeria and rebase their GDPs so they could have a clearer picture of the sectors contributing to the growth of their economies.

The Eco (the proposed common currency) he said, is planned to be introduced in the framework of the ECOWAS. For the Eco to be implemented, 10 convergence criteria set out by the West African Monetary Institute must be met. The four primary criteria to be achieved by each member country are a single-digit inflation rate at the end of each year, a fiscal deficit of no more than 4 per cent of the GDP.

“The goal is to merge the new currency with the West African CFA franc, used by the French-speaking members of ECOWAS since 1945 at a later date. This will create a common currency for much of West Africa,” Sanga stressed.

Offline Figleaf

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Re: West African countries to launch common currency
« Reply #2 on: November 19, 2017, 10:26:46 PM »
As the article points out, the model is the CFA franc. The CFA franc works because there is French pressure, knowledge and money behind it, not to mention a link to the euro. It's hard to see that extended to former British colonies.

A country that accedes to a monetary union must be prepared to agree to and maintain government budget standards. That discipline is difficult enough to maintain in the EU. Every populist, every dictator and every economic idiot will hate those restrictions and there is no experience with voluntary common decision making outside the EU. Enough reason by itself to know in advance that extension of the CFA franc area will not work.

Peter
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Offline Big_M

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Re: West African countries to launch common currency
« Reply #3 on: November 26, 2018, 02:19:16 PM »
They are clearly making progress. In October/November 2018 WAMA/AMAO ran a competition on the name and logo for ECOWAS single currency:

http://amao-wama.org/events/terms-of-reference-of-the-competition-on-the-ecowas-single-currency-name-and-logo/

http://amao-wama.org/wp-content/uploads/2018/10/Terms-of-References-English.pdf

Both links saved in Wayback Machine.
« Last Edit: December 13, 2018, 01:20:56 PM by Big_M »

Offline eurocoin

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Re: West African countries to launch common currency
« Reply #4 on: January 09, 2019, 05:21:04 PM »
The countries that are part of the Economic Community of West African States (ECOWAS) are planning to establish a single currency in 2020. Its members are Benin, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. Although at first Eco was considered as the name of the currency later a competition was launched, the results of which have yet to be announced.

Benin, Burkina Faso, Guinea Bissau, Ivory Coast, Mali, Niger, Senegal and Togo currently use the West African CFA Franc.