Digital Currencies in Ghana and Nigeria Threaten Work towards a Common Legal Tender in West Africa

The adoption of the eco, a new currency for the entire region, would help remove trade and monetary barriers, boost economic activity, and improve living standards in the community of 385 million people, according to the Economic Community of West African States (Ecowas). Seven currencies are currently in use in West Africa’s 15 countries, with eight mostly French- speaking nations using CFA francs. The remaining countries have their own currencies, none of which is freely convertible. After multiple postponements (in 2005, 2010, and 2014) following its conception in 2003, a workable deadline for the launch of the eco was set for January 2020 but, as feared, it never happened. Some experts fear the single-currency dream project could be further stunted by the emergence of central-bank digital currencies (CBDC) in West Africa’s economic powerhouses. Although officials from both countries claim that their respective digital currencies are meant to promote financial inclusion by bringing the unbanked into the financial system, the timing of those initiatives oddly coincides with the stumbling effort to get eco off the ground, according to one finance professional.

SOURCE: QUARTZ AFRICA