ECOWAS fixes 2020 for single currency adoption

The Economic Community of West African States (ECOWAS), which includes Nigeria and fifteen other countries have concluded plans to adopt a single currency for the region.

Speaking at the 54th Annual General Meeting of the African Development Bank (AfDB) in Malabo, a representative of Niger Republic, Aichatou Kane, gave the hint that 2020 will see the body adopt its own currency.

According to Kane, ECOWAS institutions have been more involved in the region’s single currency creation programme and harmonisation of the monetary policy framework to encourage regional integration and eliminate diverse tariff barriers.

When the single currency policy finally takes effect, all the West African countries will be able to use a common currency. This implies that contrary to what we have now whereby different countries in West Africa use different currencies, there will only be a single currency to be used across the sixteen countries in West Africa.

The perfect example is the introduction of the Euro which is the official legal tender across the European Union.

When the single currency policy is finally put in place by 2020, Nigeria will surely benefit from it. For one, it will eliminate the uncertainty that surrounds exchange rates. One of the many challenges with trading with other countries is that you never know which way the exchange rate will move. It may move in your favour or against you, thereby resulting in more costs for you.

This sort of uncertainty could hinder trade – particularly for smaller firms. A single currency gets rid of the uncertainty within the single currency zone, thereby encouraging trade.

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