Tumbul Trawally: Did European Geopolitics Hamper Launch of West African Eco?

There are 2 angles to this story: political & economic. The political angle has more to do with the Geopolitical rivalry between Britain & France. The founding fathers of the Organization of African Unity: Haile Selassie of Ethiopia, Nkrumah of Ghana, Nasser of Egypt, Balewa of Nigeria, Nyerere of Tanzania, Sekou Touray of Guinea, and Kaunda of Zambia, among others, wanted a political and economic union of Africa. That lofty goal was not met with much enthusiasm from some prominent Francophone leaders. These Francophone leaders were taking their cues from President Charles De Gaulle of France. President De Gaulle feared the loss of French influence in Africa if the continent became united. His fear was that the English-speaking countries would dominate the African Union. It was the same fear he expressed when Britain applied for membership in the European Economic Community (EEC), a predecessor of the European Union (EU), in the 1960s. As a result, he vetoed Britain’s application for membership twice. It was only after he left office that Britain gained membership, in 1973. President De Gaulle had always been bordered by the over-sized influence of the Anglophone world, on the world stage. The delay in the launch of the Eco currency is an extension of the rivalry between France and Britain being played on West African soil.

The rivalry between France and England goes back to the reign of King Edward III of England. In 1328, King Charles IV of France died, leaving no male heir to succeed him. King Edward III of England laid claim to the French throne through his mother, Isabella, the sister of King Charles IV of France. However, [Salic law] prohibited women from inheriting the throne, which was not uncommon during the Middle Ages. This triggered the intermittent 100-year war (1337-1453) between France and England. In fact, Britain abolished the male heir to the throne (Salic law) in October 2011. The Napoleonic wars scramble for colonies, and the desire for world domination only heightened the rivalry.

As an aside, on a larger scale, the Coup d’ Etats in West Africa and beyond did even more damage in impeding an economic union. The Coup d’ Etats stemmed from the Cold War rivalry between America and The Soviet Union. The two Superpowers had their fingerprints all over the Coup d’ Etats: be it the Americans in the overthrow of Nkrumah of Ghana, or the Soviet Union in the overthrow of Emperor Haile Selassie of Ethiopia. Their replacements had no clue as to what the benefits of an economic or political union would entail. They were more preoccupied with self-preservation and the perpetuation of their regimes. These rivalries unnecessarily delayed African economic and political union, which rendered Africa the sick child of the world. They cost Africa Dearly! A united Africa would have had a strong central government, just like China, the United States, or Russia. The continent would not have gone through the numerous coup d’ Etats, and crazy leaders like Idi Amin, Jean Bendel Bokassa, Samuel Doe, or Yahya Jammeh. We are not out of the woods–yet! The recent Coup d’ Etats in Mali, Guinea, and Burkina Faso are a sobering reminder that we still have a long way to go!

The economics angle is where ECOWAS, in coordination with the ministries of finance/economics of the member countries, come in.  The most effective government or international organisation is the one that is closest to the people harmed. Even though the World Bank, IMF, WTO, UNDP, ADB, and ECA play a vital role in West African development and prosperity, the ones closest to the needs and aspirations of West Africans are ECOWAS and the member states’ ministries of finance & economics. Therefore, ECOWAS should be at the forefront of West African development. First, let me admit that there is some genuine concern for the fear expressed by the West African Francophone countries regarding the impact of the rampant inflation and depreciation of the currencies of some of the Anglophone and Lusophone countries.

A case in point is the Nigerian Naira and The Gambian Dalasi. In 1987, one Nigerian Naira was exchanged for 1.35 US dollars; today, one US dollar is exchanged for about 460 Naira. In the early 1980s, one US dollar was exchanged for about two Gambian Dalasis; today, one US dollar is exchanged for about 55 Gambian Dalasis. One can clearly see the tremendous erosion of wealth in Nigeria and Gambia, over the course of three decades. Meanwhile, the West African Francophone currency (CFA franc) did not experience such a drastic depreciation because it was pegged to the French franc. When the French franc became the Euro, the West African Francophone (CFA franc) was devalued by 50%. However, the 50% devaluation of the West African Francophone currency (CFA franc) pales in comparison to the depreciation of the Nigerian Naira and The Gambian Dalasi. Another economic reason is that France does not want to lose the stranglehold it exercises over the West African Francophone currency, and indirectly, the monetary policies of her former colonies.

All that said, the apprehension of France and the Francophone countries over a single West African currency is overstated.  The European Union initially asked member nations to maintain a budget deficit of 3% or less of GDP, as a criterion for membership. Only Germany and some of the rich northern countries were able to meet that standard. The poorer southern European countries of Italy, Spain, Portugal, and Greece could not meet that standard. That did not delay the launch of the Euro, in 1999. Looking back, that was a good move by the European leaders! The Euro is stable and the poorer Southern European countries have grown economically. I am certain the Italians are happy to get rid of the Italian Lira, and the Greeks are happy to get rid of the Greek Drachma.    A single ECOWAS currency will do for West Africa what the Euro did for Europe. Once the Eco currency is launched, the West African Central Bank will be able to implement a uniform monetary policy for the member nations, smooth out the currency exchange rate fluctuations and tame inflation.

 The Eco currency’s fortune or success will largely depend on what goes on in Abuja, Nigeria–the country with the largest population and economy within ECOWAS, and on the fundamental principles of Economics: Supply and Demand–not on what goes on in Paris, France, or London, United Kingdom. The ECOWAS region has to be able to sell goods and services to the outside world, in order to generate demand for the Eco. For a block of countries that can deliver Nigerian crude oil, Ivorian/Ghanaian cocoa, Senegalese fish/phosphates, Gambian groundnuts, Liberian rice/palm oil, Guinean bauxite, Nigerien uranium, Beninois cotton, Bissau Guinean cashews, Malian gold, Togolese corn/sorghum, Cape Verdean caviar, or Sierra Leonean titanium/diamonds– generating demand for the Eco currency should be the least of our problems. Further, ECOWAS nations will be able to sign more favourable Trade deals with major trading blocks, on the world economic stage, to extract better prices for their goods/services, and the removal of trade barriers. It is always advantageous to negotiate from a position of strength. Individual countries will not be able to do that!

The economic benefits of a monetary union are innumerable. The elimination of the costs of exchanging currencies will be a tremendous saving to businesses and individuals.  A stable exchange rate stabilises inflation and the price of goods and services. A single currency will also increase intra-ECOWAS trade. Intra-ECOWAS trade has to be encouraged by breaking the barriers to trade, like customs duties at the borders, and removal of tariffs and quotas. According to the WTO, trade between African countries is 10% of their total trade; meanwhile, trade between EU countries is 60% of their total trade. Transportation costs within the ECOWAS countries are 40% of the total costs of goods; it is 10% within the European Union. Having a good road network will also ease trade among ECOWAS nations and reduce transportation costs. The building of infrastructure will facilitate trade and the movement of people, goods, and services. Less than 10% of ECOWAS and African roads are paved–the lowest in the world. People in Burkina Faso or Niger should not starve while there is surplus rice sitting in warehouses in Liberia, or Sorghum in Togolese warehouses.

ECOWAS countries should process their raw materials and produce–close to home, for them to capture the benefits of manufacturing. By exporting our raw materials and products to Europe, America, or China for processing, we are actually exporting jobs. The Gambian groundnuts and Nigerian palm oil are mainly sold to The Roasting Company and Unilever in Britain or Nestle in Switzerland. Unilever is a worldwide conglomerate and the parent company of the United African Company (UAC) of the Gambia and the Royal Niger Company of Nigeria. Whose standard of living is higher, the average farmer in Gambia/Nigeria or the Unilever employee at its factories in Britain? There is no comparison between them! According to the FAO, the producers receive about 15% of the price of the finished goods. We can halve acute poverty in the ECOWAS countries if we can increase the producers’ share of the price of the finished goods from 15% to 30%.  Processing close to home and reducing transportation costs will enable us to accomplish that. Nigeria produces about 2 million barrels of crude oil per day, and yet experiences refined fuel shortages.   As a result, ECOWAS countries have been unable to create jobs at the rate of population growth. The outcome is catastrophic: young people, the future of the continent, are dying in the Mediterranean Sea, the Atlantic Ocean, or the Sahara Desert.  For people to embrace agriculture or the production of minerals, it has to be worth their while.

Prosperity within ECOWAS will enable governments to invest in vital sectors of society, particularly in technology and technical knowledge. About 60% of Africa’s population are under the age of 30. These young people are the most in-tuned generation with technology, in Africa’s history. All my nieces and nephews in Jokadu Bakang, Tambana, and Karantaba have smartphones; as a result, they are more tech-savvy than the older generations. The most advanced device I used at High School was a [Slide Rule], which belonged to a friend. All they need are investments in technology. Governments should create a conducive environment for higher learning. I can bet my last penny that there are some Africans who are more intelligent than Bill Gates or Steve Jobs. The difference maker between them and us: Their government’s investment in Science Technology Engineering and Mathematics (STEM) fields.  The richest people in the world used to be the kings and queens, like Mansa Musa or Alexander the Great, then came the industrialists: John D. Rockefeller or Andrew Carnegie, followed by the finance experts: the Rothschilds and the JP Morgans; now, it is the Tech Titans: Elon Musk, Jeff Bezos, or Bill Gates.  Some of these Tech Tycoons are worth more than the entire GDP of some countries. Isn’t that bizarre?

Any delay in the adoption of a single currency result in exchange rate costs, inflation, and instability in some countries. The demonstrations in Sierra Leone last year were a result of rampant inflation, especially in food prices. Now that we have a Gambian at the helm of ECOWAS, and at some very high-level senior positions–and even though Gambia is a very tiny nation–let us punch above our weight & size and deliver the seemingly undeliverable common currency and break the trade barriers—For Good! Dismantling the trade barriers will usher in more intra-ECOWAS trade, which will translate into jobs, prosperity, and a higher standard of living for our people.  I implore you to bring a single West African currency to fruition. As the old adage says, “nothing succeeds like success”. It would inspire the Southern and Eastern African (COMESA), the equivalent of ECOWAS, to replicate the single currency, which can ultimately lead to a single African currency.

Trade increases prosperity, the standard of living, and job creation. Further, the ECOWAS governments should maintain rigid controls over public spending, and improve revenue collection and fiscal management. West African governments should automate revenue collection. In this age of the ubiquitous internet, smartphones–for a fee–Facebook (owner of Whatsapp) or Ebay, owner of Paypal, would be glad to provide that service. Automation will eliminate revenue collection in cash, which is susceptible to theft. Governments that have surplus cash are able to spend on other vital sectors of the economy, like on Healthcare and Agriculture. Don’t get me wrong! There is corruption in every country and society—but Africans take it to a whole New Level.

At the end of the day, West Africa and Africa, in general, will need to grow their economies & GDP, at least, by the rate of population growth, in order to provide jobs and maintain stability. No countries or people will do that for us! American celebrities like Madonna and Angelina Jolie flying into Malawi & Ethiopia and adopting the cutest and healthiest baby, among a Sea of babies, is not a recipe for advancement. It is like a customer choosing the best cut of meat at a butcher’s shop. That is horrifying! We need those babies to grow and attain their optimum potential in Africa—not in America or Europe.  Giving up your baby for adoption (to an unknown) is the highest level of desperation for any parent. Providing jobs and opportunities for their parents, at home, is the solution. According to the UN, about 1,300 Africans lost their lives trying to get to Europe. That is astounding!

The youngest countries in West Africa, Guinea Bissau and Cape Verde became independent in 1975, not very far off UAE (Dubai) independence (August 1975) or Singapore’s separation from Malaysia (August 1965). When Malaysia expelled Singapore from the Malay Union, Singapore had to import drinking water, according to former Prime Minister Lee Kwan Yew. Take a step back—and think about that—importing something as basic and fundamental to Human survival as drinking water, at independence!  The economic blueprint I am offering is for ECOWAS to ramp up the launch of the Eco currency and break the trade barriers.  It is not exhaustive but can offer a road map for development in West Africa.