Experts fault Eco currency implementation

By Charles Okonji

Trade experts and the members of the organised private sector (OPS) have faulted the hasty adoption of Eco as the common currency by the Francophone West Africans as it was sole idea of the English speaking countries of West Africa (Anglophone).

Throwing the first punch, Prof. Jonathan Aremu, a consultant to Economic Community of West African States (ECOWAS) on trade policy and payment system noted that the hasty adoption of Eco as the common currency by the Francophone countries was erroneous, adding that the adoption was necessitated since the agreement reached with French government on the CFA expires in 2020 as they do not want to renew the agreement.

Aremu who noted that the Francophone violated the rules for implementation stressed that common currency was good in an economic integrated community and vice versa.

He said, “The implementation is wrong because we have not even started with stage one, and they have gone ahead to start with the implementation of Eco. In the plan, single currency cannot come until stage four, so that is to say that everything is wrong with the implementation at this stage.”

Echoing similar sentiments, the Director General of the Lagos Chamber of Commerce (LCCI), Dr. Muda Yusuf, noted that the change by the Francophone West African countries from the CFA to Eco has no significant implication for the Nigerian economy.

According to him, the manner of the adoption of Eco by the Francophone countries raises concern around the mutual confidence levels between the Anglophone and Francophone countries in the region.

Yusuf  explained that the agreement by the ECOWAS countries was for Eco to be the common currency to be adopted by the all ECOWAS member states when all necessary conditions are met, but the Francophone countries curiously went ahead to adopt the name apparently without consulting the Anglophone counterparts in the region.

“This has surely created a confidence problem between the two divides. Currency issues are not the biggest issues in the integration process in ECOWAS.  The bigger issues are around the nontariff barriers to trade. These include complex and corrupt customs procedures, multiplicity of agencies and checkpoints along the borders, import bans, forex regulations, quality requirements, excessive documentation and many more,” he said.

Expatiating, “The experience of investors involved in the cross-border trade in the region has been awful. There is also the challenge of weak compliance with the ECOWAS protocols especially around the ECOWAS Trade liberalisation scheme [ETLS]. Connectivity between countries in the sub region is also a major problem.  Over 80 percent of trade in the sub-region are done by road which creates a great deal of transit problems for movement of goods in the region. There is no rail connectivity within the region.”

READ ALSO: Implementation of Eco currency impossible – Aremu

However, the Chairman of Apapa Branch of Manufacturers Association of Nigeria (MAN), Engr. Frank Onyebu, said there is nothing wrong in its implementation as long as the proper steps were taking.

According to him, the concept of a common currency is one of the original ideas of the founding fathers of ECOWAS, adding that Eco was conceived as the future currency for ECOWAS.

He pointed out that the current Eco is being driven by the Francophone countries, who agreed to abandon the CFA in favour of Eco with apparent support of France, the puppeteer of CFA Franc.

“So I see a lot of power-play coming up between the Francophone and Anglophone countries. The following questions arise: Who is going to be in charge? Who will be pulling the strings? How willing is France to detach itself from the affairs of its former colonies?

“Besides, some bad blood appears to have developed between Ghana and Nigeria. Ghana, as I understand, has decided to embrace the scheme while Nigeria wants to study the new arrangement in more detail before making up its mind.

“This, I think, is the right thing to do. Going into a scheme like this is not something you go without considering all the factors at play. What do you do about differing inflation, interest rates and other indices within participating countries? How do you tackle political structures?” Onyebu recounted.