ECOWAS pushes ahead with common currency plan
No final decision on when Eco, the proposed common currency for West Africa, will begin despite progress by most member countries of the sub-regional bloc in meeting the economic conditions
- CBN governors’ Liberia meeting raises tempo
No final decision on when Eco, the proposed common currency for West Africa, will begin despite progress by most member countries of the sub-regional bloc in meeting the economic conditions for its commencement.
Sources familiar with the development told The Nation over the weekend that discussions on the currency reached a high tempo with a meeting by Central Bank governors and Finance Ministers of the member nations in Monrovia, the Liberian capital, a fortnight ago.
Ten of the 12 ECOWAS members were said to have met the primary conditions or a set of economic criteria needed to pave the way for the take-off of the currency.
The conditions are known as convergence criteria.
The primary conditions include maintaining a budget deficit of no more than three per cent of Gross Domestic Product(GDP), keeping annual average inflation rate at or below five per cent, limiting Central Bank financing of government deficits to not more than 10 per cent of the previous year’s tax revenue and maintaining gross external reserves that can cover at least three months of imports.
The secondary criteria include keeping public debt at no more than 70 per cent of nominal GDP and ensuring that national currencies do not fluctuate by more than 10 per cent against the West African Unit of Account.
The terms are meant to ensure that participating economies are stable enough to operate under a shared currency system.
One of the sources close to the Monrovia meeting, however, said the report detailing the progress so far made by the member countries has yet to be presented to ECOWAS Heads of State for a final decision.
“The ECOWAS institutions met in Liberia two weeks ago to discuss the convergence criteria which were set by the heads of state for August 2027,” said the source.
He explained that “if most of the member countries meet the conditions by August 2027, they can start using the Eco and while others join when they meet the criteria
‘’That is the EU(European Union) model. You just have to understand that since the report of the Liberia meeting has not yet been taken to the Heads of State, it cannot be made public.”
The Eco is designed to serve as a single currency for countries in the West African sub-region, to boost regional trade, strengthen economic integration, and reduce dependence on foreign currencies in cross-border transactions.
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Official data show that the member countries that met the primary targets, especially reduction in budget deficits and inflation rates, did so close to the end of 2025.
Officials say performance on limits to Central Bank financing of government deficits and the level of external reserves remain strong across the region.
Progress on the budget deficit requirement has largely been driven by fiscal reforms in some of the countries aimed at increasing government revenue and controlling public spending.
Inflation across the region has also shown signs of easing due to tighter monetary policies, relative exchange rate stability, better coordination between fiscal and monetary authorities, and improvements in food supply.
On the secondary criteria, performance across the region has also remained largely positive.
Public debt levels in many countries have declined while domestic currencies have remained relatively stable.
Data from the Liberia meeting indicate that 11 member states maintained their exchange rates within the acceptable range of variation against the West African Unit of Account during the first half of last year.
Another source, however, revealed that recent global challenges slowed the pace at which some countries could meet the required economic benchmarks.
“Immediately after COVID, there were other headwinds like geopolitical tensions and many other structural issues that arose, which made countries not meet convergence criteria,” the source said.
But the situation across the region has started to improve as many countries implement economic reforms.
“What we’ve seen now within the region is that there is stability in almost all the countries. Most of the countries have embarked on reforms that are yielding positive results,” the source added.
She said there is growing optimism that the region will make further progress before the 2027 target date.
“ I think we should be in a good position for nearly all the countries to meet the convergence criteria ahead of August 2027, and then the matter will now be left for the Heads of State to decide which way to go. I know we are on course at this moment,” the source added.
