Plans to introduce a new regional currency in West Africa have been delayed given the economic damage brought about by Russia’s invasion of Ukraine and the lingering effects of the coronavirus pandemic, said Ivory Coast President Alassane Ouattara.
(Bloomberg) — Plans to introduce a new regional currency in West Africa have been delayed given the economic damage brought about by Russia’s invasion of Ukraine and the lingering effects of the coronavirus pandemic, said Ivory Coast President Alassane Ouattara.
The West African Economic and Monetary Union — a bloc of eight mostly French-speaking countries — agreed in 2019 to start phasing out the seven decade-old common CFA franc. But the process has been slow, with the launch of a common currency for the 15 members of the Economic Community of West African States pushed to 2027.
There’s been “significant progress on the issue of convergence, particularly in terms of inflation, growth and deficit,” Ouattara said, according to an emailed statement from the presidency. But the pandemic created a “significant deficit and inflation, especially in countries with currencies with flexible exchange rates,” which will probably delay the introduction of a common regional currency for at least a few years, he said.
Read more: CFA Franc Reforms Pose New Hurdle for West African Currency
The region’s budget deficit totaled about 7% of GDP last year, according the West African Monetary Union, compared with the 3% envisaged convergence criteria that need to be met before the new currency is introduced.
Ivory Coast’s inflation rate remains around 5%, despite rising food costs, Ouattara said.
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