ECO: Designed for integration, dogged by mutual suspicion

The announcement of the takeoff of ECOWAS Currency, ECO, would have inspired mutual applause and unreserved general commendations. This is because, among other reasons, it was scripted to facilitate sub-regional integration through trade and diplomacy. But it was not to be.

The sub-regional initiative includes Nigeria, the most coveted territory on the continent, Benin Republic, Burkina Faso, Cape Verde, The Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Niger, Senegal, Sierra Leone, and Togo.

ECOWAS leadership had been billed to work with the West African Monetary Agency (WAMA), the West Africa Monetary Institute (WAMI) and central banks in facilitating the birth of the single trade currency

ECO is an initiative of the Economic Community of West African States (ECOWAS), led by its leaders, in efforts to enthrone a regime of common currency among member-states.

At a summit in Abuja, the 15-member group, met on June 29, 2019, and formally adopted the name “ECO.” The idea of a common currency for the sub-region was first mooted nearly 30 years ago, for the purpose of boosting intra-regional trade and economic development.

By the implementation of ECO, member countries’ citizens would move freely, trade and spend the currency among the nations without exchange rate challenges, as well as aid the much-sought integration of the economies.

There were convergent criteria for the member countries, while those that met the rules would start earlier. Besides, ECO would ride on a flexible exchange rate regime, coupled with a monetary policy framework focused on inflation targeting.

The members were to pursue appropriate policies and reform programmes that would enable, grow and sustain economic growth and the structural changes. Since then, while few of the member-countries met the criteria, they have also lost the conditions as their respective economies swing as a result of domestic and global shocks.

Of the more than one billion population of the continent, these economies aggregate a population of about 385 million, and that of Nigeria alone is currently estimated to be about 200 million, perhaps the target market.