The Minister of Finance, Budget and National Planning, Zainab Ahmed, has disclosed that the Federal Government is monitoring proceedings of the planned currency change, Eco. The currency change involves eight West African countries of the Economic Community of West African States (ECOWAS).
Ahmed said the Nigerian government would respond to the decision by the ECOWAS members to adopt the Eco as the region’s currency, but it is still monitoring related activities.
“Nigeria has received the news of the change of name of the UEMOA (The West African Monetary and Economic Union) currency, the CFA to Eco supposedly as ECOWAS single currency. Nigeria is studying the situation and would respond in due course.”
The decision to adopt Eco as ECOWAS’ single currency began 30-years ago, however, due to failure to reach a resolution, the single currency plan has been delayed to date, with countries like Benin Republic, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo set to adopt the new currency regime next year, January 2020.
Nigeria’s economy and Naira at risk: Nigeria, which is the continent’s largest economy and the largest contributor to the region’s gross domestic product (GDP) by 75%, may soon have to contend with a challenge following this development.
Analysts are of the opinion that the adoption of the new single currency for trade within the region might have a catastrophic effect on Nigeria’s economy and the Naira. They have termed the move a “premature ideology” considering the region’s trade agreement which Nigeria has yet to sign.
As Nairametrics earlier reported, a report by SB Morgen opined that the adoption of a unified currency system may several shortcomings. The report also highlighted some major economic issues that call for concern. Aside from the Eco sending the Naira into extinction, it could also affect the monetary authority in Nigeria or the CBN losing its power to adjust the interest and exchange rates.
Will FG favour Eco over Naira? Although the Minister of Finance has stated that the agreed date, January 2020, is not realistic because only Togo had met the criteria necessary for the adoption of the single market currency, but with the possible loss of control on monetary policy and the possible implications on Nigeria’s economy, it’s unclear if Nigeria will go ahead with Eco currency, dumping Naira, a national symbol which portrays the nation’s independent and identity in trade.