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Ghana’s government has announced it plans to join the West African currency that will replace the CFA franc in 2020 in eight regional countries.
The adoption of the new currency, which is called the Eco, would make Ghana the bloc’s largest economy, ahead of neighboring Côte d’Ivoire, but it urged members of the currency union to ditch a planned peg to the Euro.
Eight countries of the West African Economic and Monetary Union (mostly former French colonies) are currently using the CFA Franc.
Ghana is not part of the monetary bloc and has its own currency, the cedi.
“We, in Ghana, are determined to do whatever we can to enable us (to) join the Member States of the West African economic and monetary union (WAEMU), 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 CFA franc’s value was moored to the Euro after its introduction two decades ago, at a fixed rate of 655.96 CFA francs to one Euro. The CFA franc, created in 1945, was seen by many as a sign of French interference in its former African colonies even after the countries became independent and was condemned as a representation of neo-colonialism.
Last week, ECOWAS “urges member states to continue efforts to meet the convergence criteria”, commission chief Jean-Claude Kassi Brou said after a summit of regional leaders in the Nigerian capital Abuja.
The key demands for entry are to have a deficit of less than 3 percent of gross domestic product, inflation of less than 10 percent and debts worth less than 70 percent of GDP.