ECOWAS Ramps Up Efforts to Launch Regional Single Currency, Shares 2 Benefits

• ECOWAS reaffirmed plans to launch the single currency by 2027, adopting criteria for candidate member states during its 66th Ordinary Session
• The ECOWAS Commission and WAMA were tasked with implementing reforms, while member states must ensure financial contributions to support the ECO
• The ECO aims to cut trade costs, boost regional trade, and drive economic growth, with experts suggesting a phased implementation alongside national currencies

The Economic Community of West African States (ECOWAS) has renewed its push for the implementation of the regional single currency, ECO, following key agreements reached during its 66th Ordinary Session in Abuja on Sunday.

The bloc, which comprises 15 member states, reaffirmed its commitment to launch the currency by 2027 after earlier delays caused by the COVID-19 pandemic.

In a communiqué released at the end of the session, the Authority of Heads of State and Government adopted the criteria proposed by the High-Level Committee for selecting candidate member states for the ECO launch.

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The committee emphasized that the criteria would be integrated into the protocol establishing the ECOWAS Monetary Union Agreement, Vanguard reported.

To expedite the process, the ECOWAS Commission, alongside the West African Monetary Agency (WAMA), was tasked with operationalizing the financial and institutional reforms needed for the ECO's launch.

“Member states and central banks must take immediate measures to ensure their financial contributions are made for the smooth establishment of the institutions supporting the ECO,” the Authority stated.

The High-Level Committee was also urged to intensify its collaboration with the ECOWAS Commission to meet the deadlines for launching the single currency.

Key Benefits of the ECO

The ECOWAS leadership outlined two major benefits of the regional single currency:

1. Improved Trade Efficiency

The adoption of a single currency is expected to reduce trade costs and boost intraregional trade. Currently, trade across ECOWAS is hindered by the use of various national currencies that are not easily convertible within the region.

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2. Economic Prosperity

A unified currency could enhance economic growth and improve prosperity for member states, fostering stronger economic integration across West Africa, Channels Television reported.

While some experts believe that the ECO will initially circulate alongside national currencies during the transition phase, others have suggested that the first stage of implementation could involve two ECO zones where national currencies are pegged to the ECO.

Source: Legit.ng