In 2000, the countries of West Africa expressed their desire to speed up the process of monetary integration initiated in the early 1980s, crystallized in a project for the two-phased creation of a single currency in West Africa. Under this plan, in its first phase, a single currency called ECO was to be launched by Member States of the West African Monetary Zone (WAMZ) in January 2015.
In the second phase, WAMZ was to merge with West African Monetary Union (WAMU) to create a single currency in all fifteen ECOWAS Member States in 2020. After three postponements in 2003, 2005 and 2009, West African authorities finally in July 2014 gave up launching ECO in January 2015, due to insufficient preparation and economic convergence among Member States of WAMZ.
On that occasion, they also decided to change strategy, abandoning the interim stage of 2015 with a single currency in WAMU and rescheduling for 2020 the creation of a single currency in the whole ECOWAS.
However, in the face of growing uncertainties as to the implications of the single currency on the Nigerian economy, there seems to be somewhat reluctance on the side of the current administration to go into such an uncharted path.
At the Presidential Task Force on the ECOWAS single currency programme, held in Accra, Ghana in February 2018, Nigeria cautioned against hasty moves to introduce the Eco. President Buhari had earlier kicked against the fast-track moves to introduce the single currency, at the 4th meeting of the Presidential Task Force on the ECOWAS Currency Programme, in Niamey, in October 2017. He cited the absence of right economic fundamentals and other important foundations to build on in the sub-region.
Indeed, one of the reasons for Nigeria's seeming reluctance is the limited control over Franc CFA by Francophone West African countries. The Franc CFA is used by 8 member countries of the West African Monetary Union; Benin, Burkina Faso, Cote d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.
Their monetary policies are set by the European Central Bank and executed by the Francophone West African Central Bank, in Dakar, Senegal.
In this wise, Head ECOWAS National Unit in the Ministry of Foreign Affairs, Musa Nuhu said the most important issue on this is to allow the technocrats especially the Central Banks to drive the process.
"Because when we are talking about the currency, you are talking about the lifeline of a country, you are talking about the heartbeat of a country, because it is something that has to do with fiscal and monetary policies," he said.
He said the community needs to build confidence among its members on the propriety of the single currency adding that it doesn't require much political interference.
Secondly, there are certain issues especially with countries like Nigeria with the biggest economy on the continent and the largest population.
Nuhu said, "If we are taking any decision on our currency it has to be a very cautious and careful decision that will not land our economy in any problem, that is very important, that is why our Central Bank officials have been very cautious on this."
"Recently, we know that the Francophone countries are pushing for this the more. The issue is that the Central Bank of Nigeria is asking them to delink the CFA from the Bank of France. The value of that Franc CFA, is determined by the Bank of France which house their reserves and also determines the exchange value.
"For the Nigerian Naira, we are not hiding at the back of any institution, we are on our own, our reserves are in US Dollars, in Euro and recently the Chinese RMB, so we are on our own. For a currency that is hiding at the back of another you will not understand its real value," he noted.
But as it stands, there are clear indications ECOWAS is going ahead with the introduction of the currency next year though not all member but those who have met the convergence criteria.
Rising from a three-day meeting early this month in Dakar, the Speaker of the ECOWAS Parliament Moustapha Cisse Lo said that the people of ECOWAS have a fervent desire to have a single currency to facilitate trade and promote integrated economic development.
Cisse Lo said, "the Single Currency will make it possible to lift the commercial and monetary barriers, lower the cost of transaction and spark up economic activities in the region."
"All of us are responsible in terms of politics to achieve that objective; we have to be careful to act now," he noted.
He noted that "as representatives of the people of member states, the ECOWAS parliament needs to complement the efforts of the ECOWAS Commission in the implementation and monitoring of the roadmap of the ECOWAS single currency programme."
Cisse Lo said the ECOWAS Parliament particularly needs to facilitate sensitisation and information on the single currency programme and contribute to improving understanding of the process by the public and private sectors as well civil society operators and encourage them to take ownership of it.