Nigeria is to the Economic Community of West African States (ECOWAS) what Germany is to the European Union (EU). Germany is the largest economy not only in the EU, but in the entire continent of Europe. Smaller economies like Denmark view Germany with disdain because of its cruel domination of Europe during the Second World War.
Nigeria does not have Germany’s cruel past, but most of the countries in ECOWAS hate its enormous economic muscle and intimidating population.
The federal government recently worsened a bad situation in ECOWAS with the closure of its land borders, which crippled the economies of smaller members. The floating of the Eco by some Francophone countries in ECOWAS is seen as a desperate response to Nigeria’s border closure.
The Eco is a replacement of the CFA franc and was launched some weeks ago in Cote D’Ivoire by Emmanuel Macron, the president of France. Out of the 17 countries in ECOWAS, about 12 are former French colonies.
With the assistance of France, the 12 countries had over the years managed the CFA as a common currency. The economies of the CFA countries are inextricably tied to the economy of France.
The five Anglophone countries in ECOWAS lack the monetary and fiscal management acumen that maintained stability in the CFA zone for decades. The recent call on Nigeria and other Anglophone countries to join the Eco is therefore, an odd combination of insult and an invitation to fiscal and monetary chaos in the sub-region. The Eco would be vociferously controlled by France.
France had more colonies in West Africa than Britain. Unfortunately, the game of numbers did not quite add up in ECOWAS. Nigeria, one of the few British colonies in West Africa constitutes 75 per cent of the economy of ECOWAS. That had over the years been a source of concern for the men in Paris. Even as the rulers of Nigeria lack the economic management acumen to effectively control the sub-region with Nigeria’s huge population and economic muscle, France has tried a number of intrigues to counter Nigeria’s dominant influence in ECOWAS.
France was clandestinely behind Morocco’s attempt to join ECOWAS even as the country is hundreds of kilometers off the coast of West Africa. When the move met a stiff resistance, the French fashioned out a new strategy to counter Nigeria’s influence in ECOWAS.
The new strategy is the floating of the Eco and the open invitation for Nigeria to join the common currency union controlled by France. Akinwumi Adesina, the Nigerian president of African Development Bank (AfDB) is a powerful tool in the hands of some non-African shareholders of AfDB to lure Nigeria into the Eco common currency union.
Adesina’s first term expires this year and Muhammadu Buhari, Nigeria’s president has already nominated him for a second term. Adesina is the first Nigerian to head the AfDB. He broke the jinx with his excellent performance as minister of agriculture during President Goodluck Jonathan’s administration.
Previous attempts to get a Nigerian to head the AfDB were stridently rebuffed by the non-African shareholders of the bank. Adesina might have been ordered to deliver Nigeria to the Eco common currency zone or lose his second term. That probably explains his persistent call on the federal government to join the monetary union against all odds.
The federal government should shun Adesina’s egocentric call. Monetary union is a very serious matter that requires open borders, persistent long-term planning, along with fiscal and monetary policy discipline by members. ECOWAS has a yawning deficit of those requirements.
Nigeria is currently in breach of the first requirement for a monetary union. The indefinite closure of the nation’s land borders with ECOWAS is a major disincentive for a monetary union. Nigerian rice and poultry farmers are happy with the border closure. The federal government itself feels the closure has reduced smuggling and the freighting of arms to the insurgents in the north-east. That is a huge incentive for the border closure to be extended indefinitely. That alone disqualifies Nigeria as member of the monetary union.
Nigeria might fling its borders open tomorrow if it wants to join the Francophone monetary union. However, with the perceived gains of the border closure, the federal government could be tempted into closing the borders any moment the country’s security is sufficiently threatened or smugglers escapades eat deep into its dwindling income. That is by no means the way to run a monetary union.
Inflation rate and budget deficit ceilings are perhaps the most compelling reasons why Nigeria should not join the Eco zone. There is a tentative inflation rate ceiling of five per cent and budget deficit ratio of four per cent of gross domestic products (GDP) set as requirement for membership of ECOWAS monetary union. Nigeria is grudgingly maintaining the budget deficit ceiling. However, no one in ECOWAS keeps inflation at five per cent.
The average inflation rate within ECOWAS is 13 per cent. With such wild variation in inflation rates the monetary union is an invitation to fiscal and monetary chaos.
The European Union is very strict with adherence to inflation rate ceiling as requirement for entry into the Euro zone. That is why countries from the defunct Warsaw Pact are still waiting to enter the Euro zone.
Decorum and national pride are other reasons why Nigeria should not join the Eco monetary union. With its economy constituting 75 per cent of ECOWAS, Nigeria should be the one inviting the other members to join a monetary union it helps to float.
Eco is a dastardly infringement on ECOWAS copyright by some Francophone countries and their colonial master, France. It was not floated on ECOWAS platform. It lacks any legal claim to a name that was chosen decades ago for ECOWAS currency. ECOWAS should retrieve the name Eco from the usurping Francophone countries. They can give their common currency whatever name they like. Eco is the future currency of ECOWAS. It would be floated at the appropriate time.
