The ECOWAS heads of State and West African leaders has finally endorsed the “ECO” currency at the 55th Ordinary Session a similar move made by Europe called “Euro” for West African countries which are Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo and has a total population of 385 million people. This was on Saturday June 17th 2019.
Eight countries use one currency called the CFA franc in West Africa. These are Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo.
A roadmap was created to ensure that all member countries meet three primary criteria for the adoption of the currency.
Criteria for adoption
- Member countries having a budget deficit of not more than 3%; average annual inflation of less than 10% with a long-term goal of not more than 5% by 2019.
- Countries were expected to also have gross reserves that can finance at least three months of imports.
- The other convergence criteria that have been adopted by ECOWAS are public debt or Gross Domestic Product of not more than 70%.
There is also the issue of central banks financing budget deficit not more than 10% of previous year’s tax revenue, and nominal exchange rate variation of plus or minus 10%.
The ECOWAS Chairman President Issoufou Mahamadou did not state a deadline for the adoption of ECO but said “We have not changed that but we will continue with assessment between now and then.