ECOWAS targets 2027 for Eco single currency

The Economic Community of West African States (ECOWAS) has set its sights on launching the Eco single currency in 2027, as announced by the regional bloc's President, Jean-Claude Kassi Brou. This move would see the Eco replace the CFA Franc, marking a significant step towards regional economic integration. In a recent interview on CNBC Africa, Tilewa Adebajo, the Chief Executive Officer of CFG Advisory, shed light on the feasibility and implications of this development. Adebajo expressed cautious optimism regarding the 2027 timeline, acknowledging the challenges posed by the ongoing COVID-19 pandemic. The initial plan for the Eco's launch was derailed this year due to the global health crisis, highlighting the need for a conducive economic environment before implementation. Adebajo emphasized the progress made by the francophone countries in West Africa, which already operate under a unified currency system, providing a foundation for the broader regional transition. One key advantage of the Eco's introduction is its potential impact on the African Continental Free Trade Agreement (AfCFTA), with Ghana serving as the agreement's headquarters. Adebajo underscored the strategic advantage that ECOWAS would gain within the AfCFTA by adopting a single currency, facilitating smoother trade and financial transactions across the region. However, Adebajo also noted the stringent convergence criteria that member countries must meet for the Eco's implementation, such as maintaining fiscal discipline and stable economic indicators. With challenges like Nigeria's high inflation rate hovering around 17%, achieving these criteria remains a significant hurdle. The postponement of the Eco's launch to 2027 is seen as a pragmatic move to allow for recovery from the current economic downturn. The potential benefits of the Eco single currency extend beyond regional integration, offering opportunities for enhanced trade settlements and economic leadership. Adebajo highlighted Nigeria's pivotal role as the largest economy in Africa, emphasizing the importance of leveraging this position to control the currency transition effectively. While countries like Nigeria may choose to retain their national currencies alongside the Eco initially, Adebajo stressed the importance of embracing the Eco as a medium for intra-regional trade. In evaluating the potential impact on Nigeria, Adebajo emphasized the need for strategic decision-making to maximize the benefits of the Eco. Maintaining the Naira's sovereignty while participating in the Eco system could position Nigeria as a key player in regional economic dynamics. By leveraging its market size and economic influence, Nigeria could potentially become a central hub for currency settlements within ECOWAS and the AfCFTA. Amidst discussions about the pros and cons of adopting the Eco, Adebajo emphasized the importance of leadership and strategic positioning for countries like Nigeria. As the largest economy on the continent, Nigeria has a unique opportunity to shape the regional economic landscape and drive integration efforts. By carefully navigating the transition to the Eco single currency, Nigeria could enhance its economic influence and strengthen its role within ECOWAS and the broader African trade bloc. As ECOWAS moves forward with its timeline for the Eco's launch in 2027, stakeholders will need to collaborate closely to ensure a smooth transition and maximize the benefits of a unified currency system. While challenges and uncertainties lie ahead, the potential gains in regional economic cooperation and trade facilitation make the Eco a promising initiative for West Africa's future prosperity.