West African leaders are moving forward with plans to introduce the Eco, a proposed common currency for the region, although no final date has been set for its launch.
Discussions gained momentum after a meeting of central bank governors and finance ministers from ECOWAS member states held in Monrovia, Liberia, about two weeks ago. The meeting reviewed progress made by countries toward meeting the economic requirements for the single currency.
Sources familiar with the discussions said 10 of the 12 ECOWAS member states have met the key economic conditions, known as convergence criteria, needed to support the adoption of the Eco.
The primary conditions include maintaining a budget deficit of no more than three per cent of Gross Domestic Product, keeping annual inflation at or below five per cent, limiting central bank financing of government deficits to 10 per cent of the previous year’s tax revenue, and maintaining external reserves that can cover at least three months of imports.
Additional requirements include keeping public debt below 70 per cent of GDP and ensuring national currencies do not fluctuate by more than 10 per cent against the West African Unit of Account. These measures are designed to ensure economic stability among countries sharing the currency.
Officials said the report from the Monrovia meeting has not yet been presented to ECOWAS Heads of State, who will make the final decision on when the currency should begin.
Although global challenges such as the COVID-19 pandemic and geopolitical tensions slowed earlier progress, many countries have recently introduced economic reforms that have improved fiscal stability and inflation control.
Officials remain optimistic that more member states will meet the convergence criteria before the target date of August 2027, after which regional leaders will decide on the next steps for launching the Eco currency.
