The Economic Community of West African States (ECOWAS) has formally agreed on a name for a planned common currency set to be launched in 2020.
“ECO was adopted as the name of the ECOWAS single currency,” representatives of the 15-member group agreed in the Nigerian capital, Abuja, on Saturday.
“Afri” and “Kola” had been other names suggested that were rejected by the members.
An ECOWAS statement said the aim was a “gradual approach to the single currency starting with countries that meet the convergent criteria.”
Currently, eight ECOWAS countries – Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo – jointly use the West African CFA franc, while the seven others, including Cape Verde, Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone, have their own separate currencies.
The idea of a common currency for the West African region was first mooted almost 30 years ago in the hope of boosting cross border trade and economic development.
The ECOWAS statement said the currency would be based on a flexible exchange rate regime, coupled with a monetary policy framework focused on inflation targeting.
Member states should pursue appropriate policies and structural reforms that will sustain accelerated growth and the structural transformation of their economies, it added.
The new “ECO” currency for West Africa has been compared to the European Union’s “Euro” currency.
Nigeria, which accounts for most of the region’s economic output, is the powerhouse of West Africa with over 190 population and the vastest economy.
“It is difficult to see Nigeria agree to being in a monetary union if it is not the boss,” said economist Ndongo Samba Sylla from the Dakar-based Rosa Luxemburg Foundation.
ECOWAS, which was set up in 1975, represents a total population of around 385 million inhabitants.
It comprises Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.