By Kenneth Afor
Heads of Government of Economic Community of West African States (ECOWAS) have agreed to adopt a regional currency ‘ECO’ which will be in operation within the region by January 2020.
The aim is to boost the region’s trade operations among member countriesand open its market for an economically viable region in the continent and the rest of the international market.
Over the years, since the establishment of the Economic Community of West African States (ECOWAS), there have not been a strong and a viable economic trade relations between member countries in the region except for free movement of persons without necessarily demanding for visas, success in security integration and regional co-existence among member countries, but the aim of the ECOWAS, which is for countries in the region to tap into the full potentials of the region’s economic and trade benefits for a more stronger and economic viable region is yet to
Tilewa Adebajo, chief executive officer, CFG Advisory, welcomed the move. He said: “Let’s take a look at the headline numbers, only 17% of our trade in Africa is intra Africa. If we compare that to Europe, 70% of their trade is intra European and in the Asian trading block, 60% of
their trade is intra Asia and the European value of their trade is close to eight trillion Euros. So that’s pretty significant. So I think this whole union of getting this African Union together has a potential of close to 3 trillion in trade within the continent and I think that we should begin to look to see how we can exploit it. And these are steps n the right direction for the African Continental Free Trade Agreement (ACFTA)”.
The currency agreement will be a huge opportunity for Nigeria in oil and gas sector; to export its crude to neighbouring countries in the region. Companies who are thinking of setting up their own refineries can take advantage of this initiative by supplying crude products to countries in
the region. Already, there’s a West African gas pipeline to Ghana and other countries along the coast and the West to Senegal, which can also be extended to North African countries and expanding to the East to Cameroon and straight to the Central Africa region.
He also said with the regional currency, it will reduce the volume of imports of raw materials and with that, companies in the manufacturing sector can begin to set up value-added processing plants to process agricultural produce like shear butter and cocoa, which can be exported
to the international market.
According to Adebajo, with the regional currency, locally made goods can freely enter Europe without going through the back doors by activating the Lomé Treaty of free trading of goods from Africa into Europe.
He added that Nigerian banks with ranches in most West African countries, will serve traders better to use them as a clearing house in terms of currency transactions on the exchange of goods among sellers and buyers.
Despite the existing operation of the CFA in Francophone countries in the region, the ECO will work side by side with other country’s currency before it gains full acceptance.