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ECOWAS and introduction of single currency in West Africa: problems and prospects
 
PIIS032150750008721-5-1
DOI10.31857/S032150750008721-5
Publication type Article
Status Published
Authors
Alexander M. Zhambikov 
Occupation: External Fellow of Institute for African Studies, Russian Academy of Sciences
Affiliation: Institute for African Studies, Russian Academy of Sciences
Address: Russian Federation, Moscow
Journal nameAsia and Africa Today
EditionIssue 3
Pages54-58
Abstract

The article describes the project of introducing single currency in the ECOWAS, its reasons, current situation, problems and prospects. The description outlines that although the idea of monetary integration has been discussed by the Community for more than 30 years, it has not yet been put in practice. Within the ECOWAS, there is already one common currency (franc CFA) created by France in 1945 and used by eight member states of West African Economic and Monetary Union (UEMOA) until now. The analysis includes various aspects of monetary reform of franc CFA, changing its name to eco and positions of different ECOWAS countries towards the ongoing transformation. Supported by France, the UEMOA has announced its intention to replace the unpopular “franc CFA” by “eco” that is already designed for a future ECOWAS single currency. As a guarantor, France waived some of its old requirements for common currency users, but is still ready to assist the UEMOA in case of crisis. The fixation of eco rate to euro is planned to be maintained. The most outstanding contradiction of ECOWAS and UEMOA projects is whether the rate of eco should be flexible and independent from any currency or fixed to euro (as franc CFA at the moment). Special attention is paid to political component of the transformation and possible scenarios for future. The conclusion is that adoption of ECOWAS single currency in the near future is unlikely. Moreover, even in case of success the project will not be a panacea for socio-economic problems of the Community.

KeywordsECOWAS, UEMOA, franc CFA, eco, monetary union
Received30.03.2020
Publication date30.03.2020
Number of characters17979
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