Focus: ECOWAS Plans Single Currency
What’s going on?
- ECOWAS has proposed the adoption of a single across its member states by 2020
- The Economic Community of West African States, also known as ECOWAS, is a regional political and economic union of fifteen countries located in West Africa (including Benin, Côte d’Ivoire, Gambia, Ghana, Guinea and Nigeria)
- The new currency will be named ‘ECO’
What does this mean?
- A single currency on the African continent is nothing new. In fact, an initial target launch date was back in 2003.
- African governments are in the region are keen on even more integration, in addition to existing visa-free travel and pending Free trade agreement.
- It is hoped that a single currency will ease trade within the region.
- A presidential task force to monitor the single currency creation process has been created and is headed by the heads of state of Ghana, Nigeria and Ivory Coast and the Committee of Central Bank governors,
Why you should care
- A target goal of 2020 is extremely unlikely given that there is no significant progress as regards the design, production and testing of the currency notes so far.
- Critics are very vocal about the fact that there are dramatically different levels of development across Member States e.g. Nigeria makes up 67% of ECOWAS’ GDP alone. Also, Therefore trying to align each country under one monetary policy will be difficult.
- Additionally, 8 ECOWAS countries (Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo) jointly use the CFA franc. This means that their currencies are pegged to the euro, and is guaranteed by France.
- It is argued that a single currency is a chance to cut colonial links and embrace African integration. However, adopting a single currency could mean joining a union with countries that have much higher levels of inflation and interest rates.
Read more here: https://qz.com/africa/1657000/will-west-africas-eco-currency-succeed/
Nigeria Signs Africa Free Trade Agreement
- This week Nigeria finally signed the African Continental Free Trade Area (AfCFTA). As the largest economy on the continent, Nigeria’s decision to sign the deal is a boost to the pact.
- President Buhari signed the deal at the African Union summit in Niger and called on the continent’s nations to band together to attract investment, grow local manufacturing and combat smuggling.
- Nigeria earlier pulled out from signing the agreement and said it had to consult relevant parties amid fears of competition for local markets and jobs. Since then, the Nigerian Office for Trade Negotiation says it has consulted with 27 groups, including trade unions.
- Eriteria is now only African country not to be part of the trading bloc.
- Nigeria has a lot to gain from increasing access to its goods and services to a wider African market.
- Now that AfCFTA can offer access to the enormous Nigerian market, they are in a much stronger position to negotiate with regional bodies in other parts of the world.
Read more here: https://www.bbc.co.uk/news/world-africa-48899701
Google and Facebook to build undersea cables to get millions online
- Africa remains the only continent with over half the total population without internet access at 24%
- Facebook is reportedly working on plans for “Simba” an underwater cable that will circle the continent with landings on multiple coasts.
- Google has confirmed construction plans for a cable connecting Portugal and South Africa with the first phase due to be completed by 2021.
- Deployment of high-capacity fiber-optic cables will ultimately improve connectivity and likely make internet costs much cheaper, allowing more Africans to get—and stay—connected.
Read more here: https://qz.com/africa/1656262/google-facebook-building-undersea-internet-cable-for-africa/?utm_source=email&utm_medium=africa-weekly-brief