Leaders of the 15-nation West African bloc gathered in ABUJA Nigeria capital for the ECOWAS Summit.
They are calling for greater structural reforms as they step up efforts for the introduction of a shared currency, aimed to be launched in 2020.
A statement issued on Saturday at the end of the Economic Community of West African States (ECOWAS) summit, the leaders said they had adopted ECO as the name of the planned currency.
The bloc, which represents an estimated population of about 385 million people, said it acknowledged a 2018 report which underlined “the worsening of the macroeconomic convergence” and urged member’s states to do “more to improve on their performance” as the deadline for the establishment of a monetary union approached.
The 2018 report called, among others, for the promotion and liberalization of regional trade, the consolidation of the customs union and the creation of a free trade area – all of which are yet to be met.
Mahamadou Issoufou, ECOWAS chairman and Niger’s president, said there was “a real firm political will” to increase efforts ahead of the January 2020 deadline.
“We are of the view that countries that are ready will launch the single currency and countries that are not ready will join the programme as they comply with all six convergence criteria,” Issoufou said.
Leaders in the bloc has for decades held discussions and meetings on issuing a common currency amid efforts to boost regional trade and investment, without, however, making significant progress.
Currently, eight ECOWAS countries – Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo – use the CFA Franc, while the other seven – Cape Verde, The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone – have their own currencies.
ECOWAS bloc is particularly volatile, both politically and economically. It
means countries might need to create unique responses to shocks which would be
limited by the common monetary policy control.
Moreover, it’s uncertain that regional economies are strong enough to back bailouts in the event of a crisis among participating member states,” he said.
According to the African Development Bank, regional inflation has stood at double digits since 2015, way above the five percent target outlined as one of the convergence criteria for ECO’s implementation. Meanwhile Nigeria, which controls two-thirds of the regional economy, has struggled to meet its growth projections.
In his welcoming address to the leaders at the summit, Nigerian President Muhammadu Buhari expressed concerns about increasing violence and attacks in the region.
He said “Despite the overall appreciable progress we have made, particularly in the field of political governance, our sub-region continues to face considerable security challenges,” Buhari said.
“We are all witnesses to the recurring incidents of inter-communal clashes, herders-farmer’s conflicts, banditry and terrorist’s attacks in all our countries,” he added. “The need for the adoption of a common strategy at the national and regional level to combat them (Insecurity), has become imperative”.
In recent years, several countries in the region have been dealing with both internal and external security threats.
Ethnic clashes in Mali have left hundreds dead and thousands displaced, while armed groups operating across the Sahel have been attacking targets in Niger and Burkina Faso.
Nigeria has long tried to effectively deal with threats from the Boko Haram armed group, while clashes between herders and farmers has also increased insecurity concerns in the country.