Short answer: Not yet
Alternate short answer: at least not in 2020 sha.
It doesn’t matter if you just won 45 million Naira after spending 90 days locked away with alleged fence jumpers. Or if your Liverpool predictions finally came through with BonanzaBet. If there’s anything sure to ruin your day, it will definitely be converting your earnings into Dollars.
Goes without saying, any chance to have anyone beside Awolowo and the likes staring you down when you open your wallet would be a welcome development, no? Well, this could be our reality, if the ECOWAS Eco ever comes to fruition.
Made up of 15 member states, the leaders of The Economic Community of West African States, are making attempts to have Africa as a better-integrated continent. On July 1, 2019 they adopted the name ‘ECO’ for the planned single currency to be introduced in the West African region.
So What Does This Mean For Nigerians?
Let’s ignore the fact that ‘ECO’ sounds like the name of a 90s Nigerian University cultist, should it become the single currency of Nigeria and the rest of the 14 West-African member states, here’s what we can expect:
Nigeria Will No Longer Hide Their Face When Ghana Walks Into The Room.
That’s because a single currency will mean the abolition of exchange rates.
Even though one Ghanaian Cedi currently exchanges at 67.16 Naira, with the introduction of the Eco currency, all our broke sins shall be wiped away and we will become new again.
This goes for all countries involved, even the 8 Francophone WA States (Benin, Burkina Faso, Guinea Bissau, Ivory Coast, Mali, Niger, Senegal and Togo) which currently use the CFA Franc as a uniform currency.
By doing this, trade between all countries in the region will be made infinitely easier!
Nigeria Will Be Able To Focus On Exporting Their Jollof.
With a single currency, there will be a realistic reduction in the cost of engaging in trade. By so doing, the countries involved will focus on what they do best and exchange it for goods other countries produce. Jollof rice for Ghana’s gold is a fair trade, no?
Nigeria’s Central Bank Won’t Be Able To Carry Shoulders Anymore.
And that’s a good thing. No other country’s central bank will be be either. This is the currency union will have one central bank, completely independent of any state, which will be invaluable in improving price stability.
So why aren’t our wallets filled with Eco notes Right Now?
Well, because man proposes and God Well, He disposes.
Case in point, this isn’t the first time this plan has been suggested. The idea to have a common currency has been raised four times, the first being in the year 2000, when 6 leaders of the Anglophone WA states agreed to create a harmonised monetary union.
Here’s why it’s so hard to achieve.
Because to adopt a single currency, the African states have to pass these tests:
1.Each country has to achieve single digit inflation of 5% or less.
In 2018, Ghana’ inflation rate was at 9.84%. Nigeria’s inflation rate, as of February 2019 was 11.31%. It is no easy feat to achieve.
2.ECOWAS also requires all member states to achieve a budget deficit to GDP ratio of 4% or lower before the currency is dropped.
It is currently projected that Ghana’s debt to GDP ratio will be 62% by the end of 2019. Nigeria, around 26% in 2020, when the currency is expected to launch.
It’s going to be incredibly hard to achieve.
And if that isn’t hard enough, the reality is, African countries do not necessarily trade among themselves. Overseas trade makes about 80% of total trade on the continent, while trade between African countries accounts for about 10%.
So do we really need this currency?
Time will tell. Let’s even have it first.