ABIDJAN (Reuters) - Ghana's government said it is determined to join a West African currency that will replace the France-backed CFA franc as soon as next year in eight regional countries, but it urged members of the currency union to ditch a planned peg to the euro.

Ghana's adoption of the new currency, which is called the eco, would make it the bloc's largest economy, ahead of neighbour Ivory Coast.

Ghana is not part of the West African Economic and Monetary Union (UEMOA) of mostly former French colonies that uses the CFA franc and has its own currency, the cedi.

Ivory Coast President Alassane Ouattara and French President Emmanuel Macron announced this month that West Africa's monetary union had agreed to cut some financial links with Paris that have underpinned the region's common currency since its creation soon after World War Two.

Under the deal, African countries in the bloc will not have to keep half of their reserves in the French Treasury and a French representative will no longer sit on the currency union's board.

"We, in Ghana, are determined to do whatever we can to enable us (to) join the Member States of UEMOA, soon, in the use of the eco, as, we believe, it will help remove trade and monetary barriers," President Nana Akufo-Addo's office said in a statement.

However, the statement indicated that Ghana opposed plans to keep the eco pegged to the euro, urging regional authorities to work quickly toward "adopting a flexible exchange rate regime".

The countries due to change from the CFA franc to the eco are Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo - all former French colonies except Guinea-Bissau.

The group is aiming to have the new currency up and running by the end of 2020.

Source: https://www.reuters.com/article/us-westafrica-economy/ghana-wants-to-join-new-west-african-currency-but-ditch-euro-peg-idUSKBN1YX0EH

Why not take leadership positions and have them join you? The fact they changed currency name doesn't matter. If the called the currency zeni or beri what changes? None of the Ecowas member states met the criteria for currency union except Togo. It's been nearly two decades some country has to lead the charge instead just talking.


History of ECO and membership criteria:

On April 20, 2000, in Accra, Ghana, the leaders of six West African countries declared their intention to proceed to monetary union among the non-CFA franc countries of the region by January 2003, as a first step toward a wider monetary union including all the ECOWAS countries in 2004.

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The meeting was attended by three heads of state, Presidents Olusegun Obasanjo of Nigeria, Jerry Rawlings of Ghana, and Lansana Conté of Guinea, as well as representatives from Liberia, Sierra Leone, and The Gambia. Cape Verde, the remaining non-CFA ECOWAS member, has a currency peg to the euro with the support of Portugal, and was not a signatory of the "Accra Declaration on a Second Monetary Zone."

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The four primary criteria to be achieved by each member country are: a single-digit inflation rate at the end of each year; a fiscal deficit of no more than four per cent of the Gross Domestic Product (GDP); a central bank deficit-financing of no more than 10 per cent of the previous year's tax revenue, and gross external reserves that can give import cover for a minimum of three months.

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i knew ghana would do something like that....

ghanaians are not happy with africa atall....
i wouldnt be either....

ghanaians are proud people....
you cant play pan africana with them anyhow....

A

What kind of patriotic sense is this?

It is simple economics sir nothing too smart in such decision, it would be foolish to join any nonsense euro pegged against any European currency..

tsdarkside:
i knew ghana would do something like that....

ghanaians are not happy with africa atall....
i wouldnt be either....

ghanaians are proud people....
you cant play pan africana with them anyhow....

However, the statement indicated that Ghana opposed plans to keep the eco pegged to the euro, urging regional authorities to work quickly toward "adopting a flexible exchange rate regime".

I like this idea better so the future central bank doesn't have to worry about having large reserves. They wont waste time trying to keep the currency artificially more valuable.

PS: where's the ECO central bank going to located?