The Eco: Fran­co­phone spoil­ers?

Business a.m. - - FRONT PAGE - Moses Oba­jemu

THE ECO PROJECT SEEMS more and more an im­pos­si­ble prospect as those pro­mot­ing it are work­ing at cross pur­poses. Con­ceived as a panacea to in­tra-sub re­gional trad­ing chal­lenges, the Eco of­fers a way around the dif­fi­cul­ties in pay­ment set­tle­ment...

THE ECO PROJECT SEEMS more and more an im­pos­si­ble prospect as those pro­mot­ing it are work­ing at cross pur­poses. Con­ceived as a panacea to in­tra-sub re­gional trad­ing chal­lenges, the Eco of­fers a way around the dif­fi­cul­ties in pay­ment set­tle­ment among the 16 mem­ber-states of the ECOWAS. How­ever, re­cent de­vel­op­ments around the project sug­gest that some fifth colum­nists are at work to thwart the com­mon dream from be­ing re­alised.

The Eco is the pro­posed name for the com­mon cur­rency that the West African Mon­e­tary Zone plans to in­tro­duce in the frame­work of ECOWAS. Af­ter its in­tro­duc­tion, the goal is to merge the new cur­rency with the West African CFA franc used by most French-speak­ing mem­bers of ECOWAS since 1945. ECOWAS had planned to launch a com­mon cur­rency un­der the same name in 2020.

In­di­ca­tions of a break up in the ranks of ECOWAS mem­bers and pos­si­ble sep­a­ra­tion of ways as re­gards the Eco project first emerged last year when me­dia ac­counts dis­closed that sev­eral Fran­co­phone speak­ing coun­tries in the sub re­gion had se­cretly passed the en­abling laws in their re­spec­tive coun­tries to adopt the Eco among them­selves to the ex­clu­sion of the An­glo phone coun­tries. The in­sti­ga­tor in chief was France, their colo­nial masters, which pro­posed the move for the adop­tion of the Eco as a suc­ces­sor to the CFA Franc used by the french speak­ing coun­tries. No one re­ally knows what France wanted and still wants in ral­ly­ing the coun­tries against the col­lec­tive as­pi­ra­tion of the larger ECOWAS bloc.

In late De­cem­ber 2019, Ivory Coast Pres­i­dent Alas­sane Ou­at­tara an­nounced that the West African CFA franc, used by the for­mer French colonies of Benin, Burk­ina Faso, Ivory Coast, Mali, Niger, Sene­gal and Togo, as well as by Guinea-Bis­sau, would be re­tired some­time in 2020 and re­placed with a new cur­rency – called the Eco.

The Fran­co­phone Eco, like the out­go­ing CFA, will be pegged to the euro. It will elim­i­nate the re­quire­ment for mem­bers to lodge half of their re­serves in the French trea­sury. France will also quit the cur­rency’s man­age­rial in­sti­tu­tions.

Ou­at­tara’s an­nounce­ment came as a sur­prise to the six mainly An­glo­phone ECOWAS mem­bers who don’t use the CFA franc. This is be­cause back in June 2019, ECOWAS lead­ers had for­mally de­cided at a sum­mit that the re­gion’s planned com­mon cur­rency should be called Eco — the same name as the CFA zone group now plans to adopt.

By im­pli­ca­tion, the Eco will be use in parts of the sub re­gion much ear­lier than col­lec­tively con­ceived, and in the process alien­at­ing some stake­hold­ers. This has trig­gered some con­ver­sa­tions about the unity of pur­pose of the project own­ers.

Against the back­drop of this di­vide and rule tac­tics of France and the pli­able Franco phone coun­tries, Pres­i­dent Muham­madu Buhari re­cently drew mem­ber states’ at­ten­tion to the faux pax and the need for greater com­mit­ment by the stake­hold­ers for the Eco to see the light of day and re­al­is­able.

Un­till greater com­mit­ment is shown, pres­i­dent Buhari said the dream will re­main a mi­rage. Pres­i­dent Buhari chose a spe­cial event of the vir­tual meet­ing of the author­ity of heads of state and gov­ern­ment held two weeks ago.

Buhari ex­pressed con­cern over the de­ci­sion of fran­co­phone coun­tries that form the West African Eco­nomic and Mon­e­tary Union to re­place the CFA Franc with Eco ahead of the rest of mem­ber states. He re­called that mem­ber states re­verted to a sin­gle-track ap­proach, giv­ing up Eco which is the orig­i­nal idea of the WAMZ so the ECOWAS-wide pro­gramme could thrive.

Be­fore Buhari’s in­ter­ven­tion two weeks ago, the An­glo phone coun­tries had crit­i­cized plans by the French­s­peak­ing states to change the CFA franc’s name to ‘Eco.’ The English-speak­ing mem­bers of Eco­nomic Com­mu­nity of West African States (ECOWAS), plus Guinea, had con­demned the an­nounce­ment that the French-backed CFA franc used in eight West African coun­tries would be re­named as the Eco.

The move “is not in line” with plans by the re­gional bloc to adopt a sin­gle cur­rency also called the Eco, they said in a state­ment is­sued af­ter talks.

Con­tribut­ing to the con­ver­sa­tion, a for­mer deputy gover­nor, Cen­tral Bank of Nige­ria, Oba­diah Mailafia, said it was wrong for the fran­co­phone coun­tries to uni­lat­er­ally take the de­ci­sion to re­place the CFA Franc with Eco.

“They have sim­ply gone ahead to cre­ate a fait ac­com­pli. It is not good for Nige­ria. It has taken the lead­er­ship process from Nige­ria, which ac­counts for up to 70 per cent of West Africa’s GDP.”

A mem­ber of the Mon­e­tary Pol­icy Com­mit­tee of the Cen­tral Bank of Nige­ria, Prof. Ade­ola Adenikinju, said the de­ci­sion of the fran­co­phone coun­tries to adopt the Eco had cre­ated mis­trust within the re­gion.

As the con­tro­versy around the Eco sin­gle cur­rency rages, Ge­of­frey Onyeama, Nige­ria’s min­is­ter of for­eign af­fairs, said a meet­ing of the author­ity of heads of state and gov­ern­ment of the re­gion would be held soon to iron out all the grey ar­eas.

Main­tain­ing that the sub re­gional group was in­tact, Onyeama said there was no break in the ranks of mem­ber states.

Onyeama, while brief­ing jour­nal­ists yes­ter­day, af­ter a meet­ing with Zainab Ahmed, the min­is­ter of fi­nance, bud­get and na­tional plan­ning, and the Pres­i­dent of ECOWAS, Jean-Claude Brou, said that there was no di­vi­sion be­tween An­glo­phone and Fran­co­phone coun­tries within ECOWAS over the sin­gle cur­rency adop­tion.

He added that the sub­re­gional body would hold a meet­ing of the ECOWAS Author­ity of Heads of States and Gov­ern­ments to en­sure that all the mem­ber-states were on the same page.

“That is a whole point of or­gan­is­ing this meet­ing very quickly so that we can dis­pel that no­tion that there is a di­vi­sion.

The chair­man of the ECOWAS, pres­i­dent Isoufou Mo­hammed of Niger Re­pub­lic will do well to con­vene an im­me­di­ate meet­ing of the heads of state to know the agenda of the franco phone coun­tries and to know whether the com­mon goal is still alive or busted.

L-R: Charles Olalu­woye, man­ag­ing di­rec­tor, Core Cap­i­tal Lim­ited; Ikechukwu Peter, coun­try chief ex­ec­u­tive, Ci­titrust Nige­ria Op­er­a­tions; Joy Sa­muel-Og­bo­goro, man­ag­ing di­rec­tor, First Guar­anty Health­care Lim­ited and Jeff Eje­mai, man­ag­ing di­rec­tor, First Op­tions Mi­cro­fi­nance Bank, at the launch of the com­pany’s ‘Cul­ture Trans­for­ma­tion Jour­ney’, in La­gos, on Fri­day.

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