West Africa’s quest to have a single currency–which was to be named the “eco”–has been under development for some time now. The single currency was proposed to be spent in the West African Monetary Zone (WAMZ). The eco got its name from Ecowas (Economic Community of West African States) and was to be managed by the West African Monetary Institute (WAMI), which was set up in 2001.
But ever since proposal began in the year 2000 to have the currency in circulation by 2003, most ECOWAS states have not met the criteria that allows the introduction of the currency in their respective countries. Since 2001, only Ghana out of the 18 member states have met the four primary requirements and six secondary requirements in any given fiscal year. Other member states have struggled to achieve the primary requirements, which include:
- A single-digit inflation rate at the end of each year
- A fiscal deficit of no more than 4% of GDP
- A central bank deficit financing of no more than 10% of the previous year’s tax revenues
- Gross external reserves that can give import cover for a minimum of three months
Plans to introduce the eco as a single currency for West Africa keep being postponed from its 2003 official release date. It was rescheduled to 2005, then to 2010 followed by a postponement to 2014. We’re presently in the year 2015, and it doesn’t look like it is going to be introduced anytime soon. But the question still stands as to why West African states are bent on introducing this currency when it doesn’t look like a lot of member countries will not meet the primary parameters required to introduce the currency in the sub region. Meanwhile organisations have been set up which are funded with public funds. Meetings, conferences, workshop etc are organised all with public money yet there does not seem to be a clear headway.
It of little surprise, then, that a lot of governments have demonised and showed aggression to cryptocurrencies such as Bitcoin; it is because currencies such as Bitcoin have the potential to solve problems which institutes like the West African Monetary Zone have been dealing with for ages.
Bitcoin is a sure way for West African states to come close to a single currency system, because most governments over the years have not been able to manage their respective currencies, giving way to hyperinflation and eventual collapse. Considering the way the introduction of the eco is being executed, maybe a Bitcoin Monetary Institute should rather be formed. That will be way better