Article Image 26915

Is West Africa about to get its very own euro?

The introduction of the euro in 1999 streamlined business between member states, and, after an initial drop in value, the currency strengthened rapidly against the dollar. But the recent financial crisis has highlighted flaws in the system, with weaker nation's economies making it harder for the entire zone to recover. This ongoing struggle hasn't deterred Ambassador Babatunde Ajisomo, the special representative of the president of the Economic Community of West African States (ECOWAS). He has announced plans for a euro-like single currency for the region. So how would this new union affect international money transfer?

ECOWAS

ECOWAS was founded in 1975 to promote economic integration, peace and security among its 15 member states: Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. The region is a powerful trading bloc, but by blending local currencies, Ambassador Ajisomo expects the region's economy to grow even stronger.

The effects

Like the euro, the West African currency could initially strengthen quickly, boosting the region's import power and making it more expensive to do business with. But stabilising the currency would leave it less vulnerable to exchange rate shifts, leading to greater investor confidence. So although investing in the region would be relatively more costly, it may still be a highly attractive prospect.

The member states would have to adjust to each other's economies. Wealthier countries, like Nigeria, would find the new currency less valuable than its current Naira. Poorer nations, like Sierra Leone and Mali, would find the opposite effect with their currencies, and basic necessities would become more expensive as a result.

Currency exchange

If the single currency is strong, transfers from most West African states will be more valuable thanks to favourable exchange rates, making travel and buying abroad cheaper for their citizens. Residents of nations like Nigeria, though, will find sending money relatively more expensive, while transferring money into the country will be better value. 

In the long term, the plans could lead to a strong currency union, much like the euro in the years before the crash. Hopefully ECOWAS has learned from the eurozone's mistakes.

Comparison tool

Fiona Aitkin

I've found your comparisons really useful and frequently refresh the page as we're about to pay a deposit on a house in Turkey. Pretty good.

Chloe Rogers

Your site is top, thank you. I was going to use my bank and but came across you on Forbes site, I am glad I did. I went on and used Torfx very good service got the rate right, saved me money compared to many others you list, they even helped me get an aussie bank account. Once again thank you for help!
Spain property

MAKING OVERSEAS PAYMENTS FOR BUYING PROPERTY IN SPAIN

When purchasing a property in Spain, we explain all the steps involved in the purchase. We can demonstrate how to make the most of your money when making the international payments to cover the purchase price and fees and how to avoid exchange rate risks.

Purchasing overseas property - satisfying your currency needs for payment

EMIGRATING - TRANSFERRING YOUR ASSETS OVERSEAS

Moving overseas can be daunting, with many unexpected aspects to your move you might not have considered. We cover all the financial basics of moving abroad, from the expenses to consider to the most cost-efficient ways to transfer your bank accounts and financial assets to your new home.

Market Insights

Sign up for our newsletter.

Thank You for subscribing to our Newsletter

You have successfully signed up to our Newsletter