It’s All About National Currencies – are CBDC Delaying the Single Currency in the West of Africa?
This Newsletter carried some articles in 2020 on the potential for a single currency in West Africa. The Economic Community of West African States (ECOWAS) argued that 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. Seven currencies are currently in use in West Africa’s 15 countries, with 8 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), a workable deadline for the launch of the eco was set for January 2020 but it never happened, due to an argument over whether the currency should be based on the European Euro or the US dollar. Officials from Nigeria and Ghana claim that the recent emergence of central-bank digital currencies (CBDC) in their countries are meant to promote financial inclusion by bringing the unbanked into the financial system, but some experts fear the CBDC projects will put the single-currency project permanently on ice.
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