ECOWAS leaders postpone the launch of ECO

Economic governance
Friday, 11 September 2020 16:27
ECOWAS leaders postpone the launch of ECO

(Togo First) - The ECO, the single currency projected for the Economic Community of West African States (ECOWAS), is very unlikely to be adopted this year. This is one of the conclusions of the recently ended 57th summit of ECOWAS Heads of State. 

The leaders decided to follow a new roadmap whose content was not yet disclosed. The summit however informed that the launch of the single currency has been postponed to an ulterior date while taking into account the reasons that pushed the WAEMU States to switch currencies. 

Adopting the ECO would prove very difficult considering that so far Togo is the only ECOWAS State to meet the convergence criteria fixed to this end. It should also be noted that non-WAMZ countries, namely Nigeria, The Gambia, Ghana, Guinea, Liberia, and Sierra Leone have initiated economic policies to meet these criteria. 

What about Covid-19?

It is important here to mention the negative impact the Covid-19 had on the economies of this region and public management. Most of them will record a decrease in their growth rate this year.   

As a result, the summit agreed to exempt State members from meeting the macroeconomic convergence criteria in 2020. 

A new convergence pact

Regardless, ECOWAS leaders reaffirmed their “determination to meet the convergence criteria before the creation of the single currency.” In this framework, a new pact of convergence and macroeconomic stability should be drawn toward the adoption of this currency, following the announced roadmap. 

The postponing of the ECO’s launch and the ECOWAS decision to maintain a gradual approach for the launching adoption should calm tensions between the different member States, especially toward Nigeria (which makes up 70% of the Community’s economy). It should be recalled indeed that President Buhari had expressed concerns over how one-sided French-speaking countries that form the West African Economic and Monetary Union were moving to adopt the ECO ahead of the rest of the ECOWAS states. 

Ayi Renaud Dossavi

 
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