A planned new West African currency to replace the France-backed CFA franc this year has been derailed by the coronavirus pandemic and its launch could now be up to five years away, Ivory Coast’s President Alassane Ouattara said on Saturday.
Last December, West Africa’s eight-nation monetary union announced it would sever some financial links with Paris and switch to the new currency, called the eco, by the end of 2020 while keeping it pegged to the euro.
But these ambitions have been thwarted as countries instead grapple with the economic fallout from the global pandemic. The International Monetary Fund expects Sub-Saharan Africa’s economy to contract 3.2% this year – its worst performance on record.
“We know the eco cannot be put in place this year because of COVID-19,” Ouattara told journalists during a visit to the city of Bouafle.
He said talks on the eco were held in Niger on Sept 7., where countries vowed to work on achieving the agreed criteria for the currency’s launch, including national budget deficits at or below 3% of gross domestic product.
“We think it will be difficult to get to a 3% deficit for two or three years, so personally I don’t see the eco’s arrival for three to five years,” he said.
He was speaking in a personal capacity and not on behalf of the currency union, which has not yet commented on a new timeframe for the currency’s launch.
Ivory Coast is the largest economy in the bloc, which includes Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo – all former French colonies except Guinea-Bissau.
Ghana has said it would also want to adopt the eco, but has urged members of the currency union to ditch the planned euro peg.