Eco (currency)

Member states of the WAMZ

Eco , also called ECO , is the name of the common West African currency that the West African Economic Community (ECOWAS) resolved once again in the 1993 revision of the treaty, which was to replace the previously existing currencies in 2005. Plans for a monetary union have already been postponed several times because the francophone states of the West African Economic and Monetary Union (UEMOA) in particular show little motivation to give up the CFA franc BCEAO and join the West African currency zone (WAMZ). Only a few states were able to meet the agreed convergence criteria. Members of the “ Eco-Zone ” are Ghana , Nigeria , Guinea , Gambia and Sierra Leone . Liberia joined on February 16, 2010. These are those ECOWAS countries whose currencies are not pegged to the euro (UEMOA / BCEAO countries and Cape Verde ).

After a delay of decades, the Eco is now to be introduced in 2020. In addition to the ECO member states and Cape Verde, the eight CFA franc BCEAO states also want to participate. The last planned introduction of the currency in January 2015 passed uneventfully.

For some years now, the “WAUA” (West African Units Accounts) has been the common currency (cf. ECU ) for electronic banking transactions and travelers' checks .

Convergence criteria

Main criteria

• Price level stability (PNS): inflation rate of less than 10 percent - criterion between 2001 and 2012 met by none to three member states
• Budget deficit (HD): less than 4 percent of gross domestic product without loans - criterion between 2001 and 2012 met by none to four member states
• Start-up financing by the central bank (AF): no more than 10 percent of the tax revenue of the previous year - criterion between 2001 and 2012 met by one to all member states
• Financial reserves (FR): at least equal to the total import value of three months - criteria between 2001 and 2012 met by three to five member states

Country	PNS (2018) (in percent)	HD (2011) (in percent)	AF (2011) (in percent)	FR (2010) (in months)	Remarks
Gambia	6.524	-4.8	100	7th	met two criteria
Ghana	9,837	-4.8	60	4.5	met two criteria
Guinea	9,700	-1.8	140	1.8	met two criteria
Liberia	23,429	-3.8	75	4.2	met two criteria
Nigeria	12.094	0.2	10	7.8	three criteria met
Sierra Leone	16.865	-4.8	40	5.3	one criterion met

Secondary criteria

• No local government borrowing
• Tax GDP rate greater than 20 percent
• Expenditure on government salaries below 35 percent
• Exchange rate stability of a maximum of 15 percent compared to the index
• Positive interest rate
• Government investment of at least 20 percent of tax revenue

literature

• Establishment of West African Monetary Zone , Mendel University, pp. 39ff. ( available online; PDF )

Web links

• West African Monetary Institute (English / French)

Individual evidence

1. ↑ West Africa bloc currency ECO to launch in 2020. News24, June 30, 2019.
2. ↑ Again, hope dims for Eco's takeoff in 2015
3. ^ ^{A b} Monetary Unions and its Discontent: An Institutional Analysis of the West African Monetary Institute. U. Joseph Nanna, In: Handbook on the Economic, Finance and Management Outlooks , 2013, ISBN 978-969-9347-14-6 , p. 3.
4. ^ Report for Selected Countries and Subjects. IMF. Retrieved July 11, 2019.
5. ^ Establishment of West African Monetary Zone , Mendel University, p. 41.
6. ^ Establishment of West African Monetary Zone , Mendel University, p. 42.
7. ^ Establishment of West African Monetary Zone , Mendel University, p. 44.