ECOWAS to Use Common Currency After 2020

15 member states of the Economic Community of West African States (ECOWAS) agreed to use the common currency after 2020. The currency is named “ECO.” Member states within the community with English and Portuguese as their official languages will implement this policy early before 2015, while the other member states using West African francs will begin to use ECO in 2020.

When the population of 0.3 billion within the ECOWAS begins to use the common currency, the situation becomes similar to that use of Euro, because all products in the member states will be priced in the same currency and consumers can compare the prices with others. Thus, the competition will be formed and cause the market prices to be lower. At that time, traveling in member states will no longer need currency exchange, reducing cross-border trade barriers and transaction fees. In addition, there will be no concern on the fluctuations of currency rates, which eliminates the worries of investors about the stability of prices and profits. As the inflation is foreseeable, a stable and unified currency is favorable to achieve a lower rate.