Ghana’s government said Sunday it is determined to join a West African currency that will replace the France-backed CFA franc as soon as next year in eight regional countries, but it urged members of the currency union to ditch a planned peg to the euro.
Ghana’s adoption of the new currency, which is called the eco, would make it the bloc’s largest economy, ahead of neighbour Ivory Coast.
Ghana is not part of the West African Economic and Monetary Union (UEMOA) of mostly former French colonies that uses the CFA franc and has its own currency, the cedi.
Ivory Coast President Alassane Ouattara and French President Emmanuel Macron announced this month that West Africa’s monetary union had agreed to cut some financial links with Paris that have underpinned the region’s common currency since its creation soon after the Second World War.
Under the deal, African countries in the bloc will not have to keep half of their reserves in the French treasury and a French representative will no longer sit on the currency union’s board.
“We, in Ghana, are determined to do whatever we can to enable us (to) join the Member States of UEMOA, 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 countries due to change from the CFA franc to the eco are Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo – all former French colonies except Guinea-Bissau.
The group is aiming to have the new currency up and running by the end of 2020.