postpone the launching once again to 2027, during the union’s 59th Ordinary Session that was held recently.
“The Authority commends the Ministerial Committee on the Single Currency Programme for its diligence in implementing the decisions taken at its 58th Ordinary Session held by video conference on 23rd January 2021,” the final communiqué of the meeting read. According to the statement, the period between 2022 and 2026 will cover the “convergence phase” of the ECOWAS Member States, following which the “stability phase” begins on 1 January 2027, and that is when the new currency, ECO, is expected to be launched.
According to Togolese economist and former Global Leaders Fellow, Kako Nubukpo, apart from monetary and fiscal independence, there are several other reasons for abandoning the CFA Franc more than half a decade since it was introduced to the West African region. “The first is the fact that we have had it since 1945, but that it has not generated a process of intra-community exchange,” he said, “The second criticism is that of competitiveness. The French CFA, pegged to the euro, is too strong a currency because it acts as a tax on exports and a subsidy on imports. As a result, you have trade balances that are structurally in deficit.”
He further notes that the new currency would facilitate trade and financial exchanges and increase competition, while reducing the cost of transactions.
“What makes the CFA so interesting in its analysis is that somewhere it concentrates all the ills of the franc zone economies, i.e. the lack of vision, the absence of governance worthy of the name and the difficulty in understanding that development is an endogenous process and that the issue is the financing of the internal market,” he said. “This means that the CFA franc is a vehicle for extraversion, i.e. it allows for the outflow of capital that should normally remain in Africa’s franc zone to finance emergence.”
