By Bola A Akinterinwa
The Africa Radio, Mantes La Jolie, in France, organised an international debate on the ‘risque de dislocation de la CEDEAO autour du projet Eco,’ that is, on ‘The Danger of Dislocation of the ECOWAS as a result of the Eco Project.’ The debate took place on Tuesday, 30 May, 2020 at 5 pm Nigerian time. The one-hour programme, anchored by Francis Laloupo, focused main attention on the divisions within the ECOWAS, with particular emphasis on Nigeria’s hostility towards the take-off of the project with effect from July 1, 2020. Another emphasis was placed on Nigeria’s border closure and insecurity with its attendant implications.
In this regard and without jot of doubt, there have been campaigns, more of calumny, against Nigeria’s policy stand in the Francophone world. However, and perhaps more interestingly, the three main discussants addressed the issues dispassionately. Edgar Gnansounou, Professor at the Federal Polytechnic in Lausanne and author of En finir avec le franc des colonies françaises d’Afrique, published in 2012 by L’Harmattan in Paris, made it clear that there was good logic in the position of Nigeria.
The position of Ebenezer Okpokpo, a French-trained lawyer and member of the Nigeria-France Association, is not different, While Professor Gnansounou tried to underscore an already existing Eco currency agenda, as distinct from that of the ECOWAS, Ebenezer Okpokpo traced some of the problems to rivalry. I was also a panelist. I found the topic and discussion quite interesting, especially in light of the publications of Professor Daniel Bach, a French but an Oxford-trained scholar, on the relationships between the Anglophones and Francophones in West Africa
Without any whiff of doubt, Africa’s foreign relations is largely driven by two main factors: quest for continental political unity and economic development. In the pursuit of political unity, the 1991 Abuja Treaty Establishing the African Economic Community was done. One cardinal objective of the treaty is to facilitate economic integration, especially through strategic cooperation. It was mainly for this purpose that the United Nations’ conception of a region was redefined.
In the eyes of the United Nations, Africa constitutes a region. It divided it into five sub-regions. On the cntrary, African leaders reconceptualised it in the reverse order to fast-track continental integration by considering United Nations’ sub-regions as regions, while, at least, any two states that unite to cooperate in a region will constitute a sub-region. This is the provision of Article 1, paragraphs (d) and (e) of the Abuja Treaty. It is within the context of the pursuit of the objective of regional integration that the quest for a common currency, which has become a critical centrifugal issue in the West African region, should be explained and understood.
And true enough again, the West African region is made up of Francophone, Anglophone and Lusophone countries, in terms of linguistic typology. The Francophone are numerically in the majority in terms of state sovereignty. They number eight: Benin, Burkina Faso, Côte d’Ivoire, Guinea Conakry, Mali, Niger, Senegal, and Togo. The Anglophones are five in number: Ghana, Liberia, Sierra Leone, Nigeria and The Gambia. The Lusophones are two: Guinea Bissau and Cape Verde. When critical issues are raised and it comes into voting, the .Francophone easily count on their numerical majority. In most cases, when the issues involve French colonialism, Guinea Bissau was always on the side of the Anglophones, meaning six against seven.
One major point, however, is that, in terms of de facto politics, Nigeria’s demographic strength, its size of market, its factor of not only being the biggest economy in West Africa, but also in Africa, also mean that Nigeria’s policy stand cannot simply be set aside with a stroke of the pen. Put differently, the Francophone majority cannot always have its way without factoring the interests of Nigeria into its own strategic calculations. This is one important dynamic of Nigeria’s relationship with Francophone West Africa.
And more notably is the factor of France. On the one hand, Nigeria’s main policy stand vis-à-vis France is the non-preparedness to allow the use of the Francophone immediate neighbours by France against Nigeria’s interests bilaterally, plurilaterally and multilaterally. The same is very true of France’s policy on Nigeria. Consequently, the controversy surrounding the Eco currency cannot be separated from this consideration. In other words, why is the Eco a subject of controversy and a critical factor of regional disunity with the potential to dislocate the regional organisation set up in Lagos in 1975? What prompted President Muhammadu Buhari of Nigeria to warn against the possible dislocation of the ECOWAS?
The Eco as a Problem
The genesis and exegesis of the Eco should be explained at both the levels of the Anglophones and the Francophones. It is useful to note that the Francophones started integration efforts before the making of the ECOWAS in 1975. At the level of West Africa, the Francophones have been using the CFA (Communauté Financière Africaine, meaning African Financial Community) franc since 1945, thanks to the French colonial administration and policy of assimilation. Even though the adoption of the CFA franc has some advantages both for France and the Francophones, particularly in terms of making it strong with its fixed parity with the euro, there is no disputing the fact that the CFA franc is at the bottom of the current Eco controversy for which the Francophones are now being held responsible and to which we shall return hereafter.
The Francophones established the Communauté Economique de l’Afrique de l’Ouest (CEAO), that is, West African Economic Community (WAEC) on 21 May 1970 in Bamako, Mali, following a 1967 meeting of the United Nations Economic Commission for Africa in Accra, Ghana. At the meeting, the Union douanière économique des Etats de ‘Afrique de l’ouest (Customs Union of West African States, CUWAS), which was founded on 9 June 1959, an Accra Protocol was agreed to in which the CUWAS was reorganised and its new name, CEAO, adopted later on 21 May 1970.
One of the objectives of the CEAO was the development of a harmonious and balanced development in the areas of economic integration, especially agriculture, cattle breeding, fisheries, industry, transportation, communications and tourism. The currency for economic and commercial exchanges remained the CFA franc. However, with the increasing pressure on the West African Monetary Institute (WAMI) to come up with a common currency that will be applicable to the whole region, the Francophones are compelled to espy more closely the future of the CFA franc, and especially in light of the declining French support and European Union policies.
In this regard, the conditionalities of the CFA are considered by the Anglophones to be detrimental to the collective interest of regional integration. For example, The CFA franc was created on December 26, 1945 and comprises 14 users: on the one hand, 8 Francophone countries in West Africa (Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali Niger, Senegal and Togo) all of which have the UEMOA as their Central Bank, and, on the other hand, six member-States (Cameroon, Central Africa, Congo, Gabon, Equatorial Guinea and Chad) of the CEMAC (Communauté Economique et Monétaire de l’Afrique Centrale, that is, Central African Economic and Monetary Community), as their own Central Bank: For both the UEMOA, founded on 10 January 1994 and the CEMAC, founded on 16 March, 1994, the CFA franc is pegged to the euro, and guaranteed by France, which also determines the parity of the currency. The first implication of pegging the CFA franc to the euro is that any sudden devaluation of it is ruled out. However, opposition to the common currency has become stiff for various reasons.
First, France’s own franc no longer exists; Second, there is no good justification for printing the CFA franc banknotes in France only. It can as well be printed in Africa; Third, there is no good basis for France to be managing the CFA franc; Fourth, even though the ‘insurance mechanism offered by the French Treasury to the franc zone’ only ‘makes it possible to insure against the failures of economic and political governance in Africa,’ the truth remains that the mechanism cannot ‘allow Africa to start its structural transformation.’ Caros Lopes, economist and former deputy Secretary-General of the United Nations, has it that the mechanism is ‘obsolete.’ Fifth, for guaranteeing the CFA franc, France requires the Member States in the franc zone to deposit 50% of their foreign exchange reserves with the French Treasury. These are the background complaints on which the current controversy surrounding the adoption of the Eco is predicated. But before explicating the controversy, it is useful to seek understanding of the efforts and position of the Anglophones.
The Anglophones, like their Francophone counterparts, envisaged monetary cooperation and union in their constitutive agreement done in Lagos in 1975. As provided in Article 2(1) ‘it shall be the aim of the Community to promote cooperation and development in all fields of economic activity, particularly in the fields of industry, transport, telecommunications, energy, agriculture, natural resources, commerce, monetary and financial questions and in social and cultural matters. . .’ For the purposes of the foregoing, paragraph (h) of the same Article 2 requires Member States to ensure ‘the harmonisation required for the proper functioning of the Community of the monetary policies of the Member States.’
True enough, the WAMI came up with the coinage of ‘Eco’ as a possible name for the common currency in the ECOWAS region and the WAMI has been working towards it. The origin of the efforts is traceable to 20 April, 2000 when The Gambia, Ghana, Guinea Conakry, Liberia, Nigeria and Sierra Leone decided in Accra, Ghana, to create a second monetary zone in West Africa and to use the name ‘Eco’ for its currency. The Eco was panned to co-exist with the CFA franc and also to be merged together eventually. It was on this basis that the WAMZ would be established in 2002. Agreement was reached that every Member State should maintain a domestic exchange rate within a fixed range of 15% against the dollar. Although the long term objective was to eventually to merge the Eco with the CFA franc for the purposes of a common regional currency, this objective could not be achieved before the June 2019 ECOWAS Summit in Abuja. And true, the Eco has become a political lull and can no longer be achieved with ease in light of an imminent dislocation of the ECOWAS.
Dynamics of Dislocation
Apparently because of re-election strategy, President Alassane Ouattara punctured the understanding agreed to by the ECOWAS Council of Ministers, arguing that the ultimate decision is to be taken by the Assembly of Heads of States. He simply renamed the CFA franc and called it Eco. In this regard, is it the Francophone Eco or the Anglophone Eco as agreed to within the framework of the WAMI? Whatever is the case, this is the background to the growing speculations about an impending dislocation of the ECOWAS. The issue of Eco has sharply divided the regional organisation.
A six-point dynamic currently constitutes the object of possible dislocation of the ECOWAS in the near future. The first is colonial legacy and leadership mentality, which former President Jerry Rawlings of Ghana said is largely responsible for bad governance in Nigeria. President Alassane Ouattara is apparently suffering from the virus of colonial legacy and mentality. In the company of French president, Emmanuel Macron, on 21 December, 2019 Alassane Ouattara announced in Abidjan that the UEMOA Member States had decided
to reform the CFA franc and therefore had changed the name of the CFA franc to Eco. The decision flagrantly conflicted with the collective decision reached in Abuja on June 29, 2019. This is a clear situation of an ECOWAS order being challenged by the counter-order of President Ouattara, not only creating another situation of an encounter between the Anglophones and the Francophones, but also resulting in disorder in the region.
Second, on Wednesday, May 20, 2020 President Macron of France not only bought the idea of the Eco replacing the CFA franc, but also acceded to the idea of no longer keeping 50% of the foreign reserves of the Francophones in her Treasury, but will only serve as a guarantor for their new currency, Eco. France will also no longer send any French representative to serve on the board of the Central Banks, UEMOA and CEMAC. This French position further complicates any attempt aimed at finding a compromise.
Third is the perception of unfaithfulness on the part of the Francophones. Without any shadow of doubt, the general or common agreement is that the term ‘Eco’ is reserved to be used as name of the regional currency, but the Francophones are perceived to have unilaterally adopted it to replace their CFA franc. This is an expression of French magouilles.
Two issues are raised here: perception of unfaithfulness or little commitment, not to say non-commitment, of the Francophones to the project of monetary union in the region; and abuse of the established sine qua non convergence criteria for the introduction of the Eco currency. Nigeria’s President Muhammadu Buhari made this issue of unfaithfulness quite clear in his twitter handle @MBuhari. He put it thus: ‘it gives me an uneasy feeling that the UEMOA zone wishes to take up the Eco in replacement for its CFA franc ahead of other ECOWAS Member States. It’s a matter of concern that a people with whom we wish to go into union are taking major steps without trusting us for discussions.’
There are critical questions directly and indirectly raised in PMB’s statement. He raised the issue of ill feelings; attempt to chance others; disregard for the position and interest of others; and that the replacement of the CFA franc is a ‘matter of concern.’ This is a diplomatic terminology that is synonymous with a very serious complaint and objection. In this regard, PMB has it that ‘we cannot ridicule ourselves by entering a union to disintegrate, potentially no sooner than we enter into it. We need to be clear and unequivocal about our position regarding this process.’ Consequently, in the strong belief that Member States cannot leave anything to ‘mere expediencies, PMB called for caution and compliance ‘with the agreed process of reaching our collective goal, while treating each other with utmost respect.’ Fourth is the set of convergence criteria for the possible introduction of the Eco: that, in each country and at the end of each year, the inflation rate should be a single digit; the fiscal digit should not be more than 4% of the GDP; the Central Bank deficit-financing should not be more than 10% of the previous year’s tax revenues; and that the gross external reserves must enable an import cover for a minimum of three months.
Other relevant convergence criteria include the prohibition of new domestic default payments and liquidation of existing ones; ensuring that tax revenue is equal to or greater than 20% of the GDP; wage bill to tax revenue should be equal to or less than 35%; public investment to tax revenue should be equal to or greater than 20%; and more important, there must be a stable real exchange rate and a positive real interest rate. Only Togo is on record to have met virtually all the requirements. This means that the environmental conditionings for the introduction of the Eco are not yet there.
A fifth dynamic is what a Togolese economist and former Minister of long-term Strategy and Public Policy Evaluation, Kako Nubukpo, has called diplomatic breach in a report published on 12 February 2020 in the Africa Report. And true enough, in reaction to the announcement of the replacement of the CFA franc with the Eco by President Ouattara, the WAMZ Council of Ministers criticised the announcement. In the eyes of Mr Nubukpo, ‘it’s unheard of for a Council of Ministers to criticise a Head of State’s pronouncements. It’s a serious breach of the most basic rules of diplomacy.’ The significance of this breach is not only to express utmost anger but to also learn that there are limitations to the rigidity of diplomatic protocol. In fact, the world is currently witnessing definitional changes in diplomatic lifestyle, thanks to President Donald Trump of the United States.
Sixth, and perhaps more interestingly, is the advice given by the Association of Bureaux de Change Operators of Nigeria (ABCON) to the Federal Government of Nigeria. In the words of its President, Aminu Gwadabe, ‘Nigeria must not adopt the currency with France or Euro as the background promoters to avoid enslaving West Africa economically. If the prime objective to facilitate cross-border trade and economic development of the Member States is still to be achieved, the structure of the system must be built on fundamentals in the sub-region to compete with other economic blocks.’
However, the Francophones do not necessarily deny the existence of the reality of these observations, and particularly the convergence criteria. However, in the eyes of the Ivoirian leader, Alassane Ouattara, the reality of a monetary union cannot but be far-fetched with the current situation economic difficulties on ground. One good way forward, in his thinking, is to begin with some Member States, while allowing others to join later.
As good as this suggestion may be, the question of Togo being the only country that has met the requirements, while others are yet to meet them, raises the extent of usefulness of any urgent take-off at the level of only the Francophones. In fact, what prompted the establishment of the convergence criteria in the first instance? If the successful take-off of the common currency was subject to meeting ten basic convergence criteria ab initio, what is it that has now explained the change in situation?
In essence, the controversy over the Eco as a regional currency appears to be the crescendo of the mutual suspicions on which the ties between Abuja and Yamoussoukro are currently based. It is a direct manifestation of Franco-Nigerian rivalry by proxy. True,
relations between Nigeria and the Côte d’Ivoire have not always been easy bilaterally, plurilaterally and multilaterally. Bilaterally, the irritant is traceable to that country’s active support for the Biafran secession. Plurilaterally, the rivalry between the ECOWAS, sponsored by Nigeria and the Houphouet-Boigny-driven CEAO explains clearly the misunderstanding. The CEAO is dead but the CFA franc-turned Eco is in the making to resurrect it. Multilaterally, France is an immediate neighbour of Nigeria by the principle of propinquity. The interests of both countries must therefore always be first reconciled for real progress to exist and fast-tracked. Unfortunately, however, this is difficult because the argument that there are no permanent enemies or friends, but permanent interests, is, at best, a myth as a geo-political evaluation of Franco-Nigerian policies have clearly debunked it. True, ECOWAS without Nigeria is a vacuum. It should therefore be prevented from self-dislocation.