ECOWAS AND THE ‘ECO’ ILLUSION
The idea of a common currency should be shelved
Finance Minister, Olawale Edun last Friday exhumed the illusion of an Economic Community of West African States (ECOWAS) single currency (named ECO) at a meeting with some stakeholders within the sub-region. He reportedly emphasised the importance of the ECO “in fostering economic growth and development in the region and reiterated Nigeria’s commitment to the successful implementation of the single currency.” Before getting carried away into committing scarce resources into another vanity project, it is important to remind Edun that not only has ECOWAS been talking about this monetary union for more than three decades now, but it has also set and shifted dates for a realisation of this objective repeatedly without achieving anything. Besides, the timing is most inauspicious.
It is indeed noteworthy that Edun spoke on the same day ECOWAS president, Omar Touray, confirmed that Mali, Burkina Faso, and Niger’s reluctance to rejoin the regional bloc. “Despite our entreaties, in the form of softening of sanctions, invitation of the governments to technical meetings, and request for meetings, we have not yet gotten the right signals from these Member States,” Touray said. “It has become evident that changes in the international system, which is significantly affecting our member states, are playing a role.” If ECOWAS is unable to persuade these three countries to return to the union, of what use is the currency to a shrinking regional body?
We must state clearly that we hold no objection to the idea behind a common currency for West Africa. A major benefit of this idea, according to its proponents, is that with an estimated population of about 250 million people spread over many countries, a unified monetary system will provide an enormous market for the development of the sub-region. Innovative and forward looking as that may seem, however, it is our view that the implementation will take much more commitment in an environment that is still caught up in atavistic colonial cleavages. Apart from the huge capital outlay for the realisation of such ambitious agenda which is not there, the timeline for monetary union seems to fly in the face of contemporary global realities. Against the background that Europe took several steps before deciding on Euro, how will a regional economy that is not denominated in any currency suddenly come up with a binding monetary union?
What this plan presumes is a degree of economic sanity and progressive integration of extant national interests that are nowhere near what is needed to create a common currency. Yet, as we have repeatedly canvassed on this page, West African leaders should face the common challenge of poverty, which they all face before thinking of a common currency that is no more than mere pipe dream. Development and regional integration are, first and foremost, about the nurturing and use of human capital to create a hub of capacities.
We must also remind West African leaders that it was this recourse to hasty and ill-digested decision making which led to the introduction of ECOWAS travellers’ cheque some years ago with the result that it could not survive beyond one year. Therefore, while the ECOWAS regional currency plan may not be a bad idea in terms of its perceived linkages with the commission’s broader goals of regional integration, it is, for now, best shelved. It is nothing but an organised waste of time. The regional solidarity needed for the next steps is missing; the reforms that should precede such a currency have not been carried out and there is overwhelming evidence of limited consensus on key issues and resolutions that had to be made at extra-ordinary meetings where a full house would indicate genuine commitment. ECOWAS leaders should perish the illusionary idea of ECO.
