West African nations have adopted a flexible currency regime after making considerable progress on plans for a single currency but the bloc would first need to set up a monetary union as it strives for regional integration.
The Heads of State of the 15-member Economic Community for West African States (ECOWAS) met on Saturday in the Abuja to review progress on integration.
The body said in a statement that the bloc had made considerable progress on the single currency and has adopted “ECO” as the currency’s name. A Nigerian official at the meeting said the body aimed to launch the “ECO” next year.
Regional integration has been a subject of discussion for the bloc over the past decade which has encountered hurdles including questions around the currency of trade and the strengthening of individual economies within the region.
Several West African economies rely on commodities whose prices are regulated on international markets. Nigeria faced a recession in 2016 after the price of oil plunged two years earlier. It has since recovered but growth is still fragile.
Nigeria, the largest economy on the bloc, operates a multiple exchange regime and a managed float currency, while several other states have their currencies pegged to the euro. ECOWAS has asked members to boost the identification of people to facilitate free movement and remove barriers to trade across the bloc. Like ECOWAS, Nigeria has refused to join an African-wide trade deal, which came into force last month and is meant to eliminate most tariffs to create a single market with the free movement of goods and services.
The body acknowledged the worsening macroeconomic convergence among member states but urged members to improve performance especially as the deadline for setting up a monetary union nears.