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Ghana to join Eco, future common currency for West Africa
Ghana is ready to give up its currency, the cedi, to join Eco, the name of the new West African common currency, which is to replace the CFA franc at the end of 2020.
Updated 01/03/2020 | 12:18
published on 01/03/2020 | 12:18
Ghana, which has been beating its own currency since 1958, intends to quickly join the future "Eco" monetary zone, which will replace the CFA franc. "We in Ghana are determined to do everything we can to join the members of Uemoa (The West African Monetary Economic Union Editor's note), quickly, in using the Eco, which we believe, will help us to remove trade and monetary barriers , " said Ghanaian President Nana Akufo-Addo.
Uemoa currently brings together 8 countries with the CFA franc in common : Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. But the CFA zone wants to expand to other economies in the region to speed up economic exchanges.
On the way to Eco
The West African Monetary Economic Union and France signed an agreement on December 21, 2019 for an in-depth reform of the CFA franc . Initially, the Eco will remain pegged to the euro, Paris will ensure its parity with the European currency. A measure that will give confidence in the new currency pending its full independence.
Before the end of 2020, the CFA franc should become the "Eco", which will ultimately be the future single currency of the Economic Community of West African States (ECOWAS). To the 8 countries of the CFA zone could be added Gambia, Sierra Leone, Liberia and Cape Verde. Until the Nigerian economic giant ...
Ghana, ahead of the Ivory Coast
Producer of cocoa, bauxite, gold and petroleum , Ghana is currently the second economy of the region behind Nigeria, but ahead of Côte d'Ivoire. Accra sees in Eco the opportunity to eliminate trade and monetary barriers and to increase economic exchanges in the sub-region.
However, the Ghanaian authorities urged members of the monetary union to abandon fixed parity with the euro and adopt "a flexible exchange rate regime" . Parity with the euro, if it can give confidence in the new currency, has the defect of being a strong currency, which risks undermining the competitiveness of the economies of the region.
But monetary instability is also a concern. In recent years, the cedi has been under pressure. It has fallen to its lowest level in recent weeks, due to the large budget deficit and the deepening of the debt.
Waiting for Nigeria ?
If this desire to adopt the Eco were to materialize , Ghana would become the leading economy in the Eco zone, ahead of Côte d'Ivoire. While waiting for Nigeria, the region's real economic heavyweight, to join it in turn. This is a completely different question, since Nigeria alone represents more than 60% of the economy of the 16 countries in the region. Suffice to say that if this state abandons the naira for the Eco, the oil giant would risk becoming the boss of the future monetary zone.
Ghana to join Eco, future common currency for West Africa
Ghana is ready to give up its currency, the cedi, to join Eco, the name of the new West African common currency, which is to replace the CFA franc at the end of 2020.
Updated 01/03/2020 | 12:18
published on 01/03/2020 | 12:18
Ghana, which has been beating its own currency since 1958, intends to quickly join the future "Eco" monetary zone, which will replace the CFA franc. "We in Ghana are determined to do everything we can to join the members of Uemoa (The West African Monetary Economic Union Editor's note), quickly, in using the Eco, which we believe, will help us to remove trade and monetary barriers , " said Ghanaian President Nana Akufo-Addo.
Uemoa currently brings together 8 countries with the CFA franc in common : Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. But the CFA zone wants to expand to other economies in the region to speed up economic exchanges.
On the way to Eco
The West African Monetary Economic Union and France signed an agreement on December 21, 2019 for an in-depth reform of the CFA franc . Initially, the Eco will remain pegged to the euro, Paris will ensure its parity with the European currency. A measure that will give confidence in the new currency pending its full independence.
Before the end of 2020, the CFA franc should become the "Eco", which will ultimately be the future single currency of the Economic Community of West African States (ECOWAS). To the 8 countries of the CFA zone could be added Gambia, Sierra Leone, Liberia and Cape Verde. Until the Nigerian economic giant ...
Ghana, ahead of the Ivory Coast
Producer of cocoa, bauxite, gold and petroleum , Ghana is currently the second economy of the region behind Nigeria, but ahead of Côte d'Ivoire. Accra sees in Eco the opportunity to eliminate trade and monetary barriers and to increase economic exchanges in the sub-region.
However, the Ghanaian authorities urged members of the monetary union to abandon fixed parity with the euro and adopt "a flexible exchange rate regime" . Parity with the euro, if it can give confidence in the new currency, has the defect of being a strong currency, which risks undermining the competitiveness of the economies of the region.
But monetary instability is also a concern. In recent years, the cedi has been under pressure. It has fallen to its lowest level in recent weeks, due to the large budget deficit and the deepening of the debt.
Waiting for Nigeria ?
If this desire to adopt the Eco were to materialize , Ghana would become the leading economy in the Eco zone, ahead of Côte d'Ivoire. While waiting for Nigeria, the region's real economic heavyweight, to join it in turn. This is a completely different question, since Nigeria alone represents more than 60% of the economy of the 16 countries in the region. Suffice to say that if this state abandons the naira for the Eco, the oil giant would risk becoming the boss of the future monetary zone.