West African states adopt flexible FX regime for regional trade

By Felix Onuah
ABUJA, June 30 (Reuters) - West African nations have adopted
a flexible currency regime after making considerable progress on
plans for a single currency but the bloc would first need to set
up a monetary union as it strives for regional integration.
Heads of State of the 15-member West African Community of
African States (ECOWAS) met on Saturday in the Nigerian capital
Abuja to review progress on integration, the body said.
The body said in a statement the bloc had made considerable
progress on the single currency and has adopted "ECO" as the
currency's name. A Nigerian official at the meeting said the
body aimed to launch the "ECO" next year.
Regional integration has been a subject for discussion for
the bloc over the past decade which has encountered hurdles
including questions around the currency of trade and the
strengthening of individual economies within the region.
Several West African economies rely on commodities whose
prices are regulated on international markets. Nigeria faced a
recession in 2016 after the price of oil plunged two years
earlier. It has since recovered but growth is still fragile.
Nigeria, the largest economy on the bloc, operates a
multiple exchange regime and a managed float currency, while
several other states have their currencies pegged to the euro.
ECOWAS has asked members to boost the identification of
people to facilitate free movement and remove barriers to trade
across the bloc.
Like ECOWAS, Nigeria has refused to join an African-wide
trade deal, which came into force last month and is meant to
eliminate most tariffs to create a single market with the free
movement of goods and services.
The body acknowledged the worsening macroeconomic
convergence among member states but urged members to improve
performance especially as the deadline for setting up a monetary
union nears.

(Writing by Chijioke Ohuocha, editing by David Evans)