West African Eco Currency.
BY ABAYOMI AZIKIWE
Currency reforms must be linked to genuine unity and sovereignty
There has been much discussion and debate over the potential for adoption of a new regional medium of exchange in West Africa particularly in relationship to the status of the CFA zone which is pegged to France.
This CFA currency zone formed in 1945 has been a consistent mechanism utilized by Paris to maintain economic dominance over its former colonies in the region.
The existence of the CFA coupled with the continued presence of French military forces and the coordination of its regional counterparts is designed to ensure that neo-colonial interests are upheld while rendering the majority of people to financial dependency. With a legacy of colonial diversity in the region, it seems inevitable that divisions will arise over the nature and character of monetary transition based upon which metropole welds the most significant influence inside the various post-independence nation-states.
Formed in 1975, the Economic Community of West African States (ECOWAS) is one of the leading regional organizations on the continent. The organization includes the Federal Republic of Nigeria, a former British colony which now is a leading oil exporter which several years ago had briefly been considered the number one economic powerhouse in Africa.
ECOWAS is one of several regional groupings which have developed during the period since the late 1950s and early 1960s when African nations began to emerge from colonialism. Moreover, West Africa had been a center of the Atlantic Slave Trade for centuries, the economic system which built Europe and the United States into imperialist centers fueled by the exploitation of labor and natural resources.
Economic development historically has been a dialectical process. The growth of Western Europe and North America was contingent upon the domination of Africa, Asia and Latin America.
To a large degree this global construct still exists well into the 21st century prompting the imperatives for the second phase of liberation. Beyond the political independence of these nation-states, there is the necessity of breaking free from the economic entanglement which has only benefited elites which are closely allied with the former colonial powers and the U.S., the principal anchor of neo-colonialism and imperialism since the conclusion of World War II.
According to its website: “Member countries making up ECOWAS are Benin, Burkina Faso, Cape Verde, Cote d’ Ivoire, The Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Sierra Leone, Senegal and Togo. Considered one of the pillars of the African Economic Community, ECOWAS was set up to foster the ideal of collective self-sufficiency for its member states. As a trading union, it is also meant to create a single, large trading bloc through economic cooperation.” (https://www.ecowas.int/about-ecowas/basic-information/)
Consequently, in congruence with its mission, some form of economic integration and monetary transition is necessary to bring about societal development. Yet the question becomes which system can guarantee this transformation and to what degree does the reforms require a complete severing of the existing links with the imperialist nations?
This same ECOWAS mission statement on its website notes: “The Vision of ECOWAS is the creation of a borderless region where the population has access to its abundant resources and is able to exploit same through the creation of opportunities under a sustainable environment. What ECOWAS has created is an integrated region where the population enjoys free movement, have access to efficient education and health systems and engage in economic and commercial activities while living in dignity in an atmosphere of peace and security. ECOWAS is meant to be a region governed in accordance with the principles of democracy, rule of law and good governance.”
The Debate over the Movement Away from the CFA to the ECO
Since the declaration about the purported abandonment of the CFA zone and the adoption of a new ECOWAS regional currency called the “Eco”, questions have arisen over the actual character of the monetary system that is ostensibly designed to emerge. Apparently, the new currency will not be sovereign. The new money is pegged to the Euro as opposed to the French franc.
In addition to the linking of the Eco to the Euro, French President Emmanuel Macron appears to support the transition for the former colonies. This of course has generated suspicion of the new currency from British colonies such as Nigeria and Ghana which have refused to adopt the proposal for the Eco.
There are two rival monetary zones in West Africa which have taken different positions on the new proposed currency. The West African Economic and Monetary Union (WAEMU) consisting of Benin, Burkina Faso, Guinea-Bissau, Côte d’Ivoire, Mali, Niger, Senegal and Togo, all of which are former French colonies except for Guinea-Bissau, which won its independence from Portugal in 1974 after a protracted armed struggle led by the African Party for the Independence of Guinea and Cape Verde (PAIGC) formed and led by Amilcar Cabral.
Another currency system known as the West African Monetary Zone (WAMZ), composed of Nigeria, Ghana, Gambia, Liberia, Sierra Leone, and Guinea-Conakry, has rejected the imposition of the Eco saying that it will not accept the reforms initiated by WAEMU. All of these states, with the exception of Guinea-Conakry, were former British colonies. Guinea-Conakry was the first former French colony to vote in favor of independence in 1958 and obviously to a certain degree maintains its distance from the CFA franc at least in this instance.
Affiliates of WAMZ held a meeting in mid-January in Abuja, Nigeria where opposition to the Eco was at the top of the agenda. Nigerian Finance Minister Zainab Ahmed said on behalf of the WAMZ Convergence Council in a joint communique that the imposition of the new regional currency was “inconsistent with the decision of the Authority of the Heads of State and Government of ECOWAS for the adoption of the eco as the name of an independent ECOWAS single currency.” (https://www.cnbc.com/2020/01/17/west-african-eco-currency-sparks-division-over-timetable-and-euro-peg.html)
The same joint communique continues emphasizing that: “WAMZ Convergence Council wishes to reiterate the need for all ECOWAS member countries to implement the decision of the Authority of the Heads of State and Government towards the implementation of the revised roadmap of the ECOWAS single currency program.” Such a statement suggests that the decision for the transition to the Eco could very well be another means for the continuation of French and European dominance over the West Africa region.
Currency Zones Differences Portend Much for Maintaining Political Stability
This debate is a reflection of the crises of governance and inter-state relations within the ECOWAS region. Problems have developed in the recent period involving the contested outcome of the national elections in Guinea-Bissau; the discontent generated by the refusal of the Gambian president to leave office as originally mandated; the closure of borders by Nigeria which has impacted the import and export of goods to other regional states such as Ghana; among other issues. (https://www.dw.com/en/ghanaian-traders-livid-at-nigeria-border-closure/a-52189203)
In reference to Guinea-Bissau, leading up to the national elections in November 2019, ECOWAS announced that its regional military force was placed on standby in the event of another attempt to stage a coup by the armed forces of the country of 1.5 million people. This statement by the regional body was quite interesting in light of the current problems in Gambia, where ECOWAS under the leadership of neighboring Senegal, brokered the exit of former President Yahya Jammeh in early 2017 due to a political dispute over the 2016 elections. In 2020, after existing President Adama Barrow has reneged on a promise to uphold term limits is facing mass demonstrations demanding his removal and the return of Jammeh.
Senegal, it must be noted, maintains a special military relationship with the U.S. Africa Command (AFRICOM). Annual military exercises coordinated by AFRICOM had conducted war games based upon the possibility of such scenarios as did occur in Gambia during 2016-17.
With specific reference to the closure of Nigeria’s borders to certain imports and exports from Ghana and other regional states, much consternation has arisen in Accra where some business people have called for President Nana Akufo-Addo to reciprocate with similar economic policies directed at Nigeria. Ghana has been reluctant to carry out such measures insisting upon dialogue to resolve these matters.
The contradictions between the imperatives of regional and ideally continental unity and unification, being contrasted with the perceived interests of nation-states, must be overcome in order for authentic monetary reforms to be implemented. These disagreements related to economic policy will hamper as well the capacity of ECOWAS and other regional entities in Africa to address internal and inter-state differences that impede genuine growth.
Abayomi Azikiwe is the Editor of Pan-African News