Eco, CBDC or Bitcoin?
What West Africans Want!
Apart from working remotely for many international blockchain firms, I am also into Agribusiness. I buy raw materials from border towns between Ghana and Togo (almost 9hrs drive from Accra-Ghana) and sell to market retailers, making my cuts in the middle.
Even though most of the villages I ply my trade in are Ghanaian villages, many of them trade using both the CFA franc and the Ghana cedi(GHC), and farmers mostly prefer to sell their goods to traders with CFA francs simply because it commands higher value as compared to Ghana cedis.
This got me thinking about a common currency to help facilitate trade among West Africans, especially at a time when the Continental Free Trade Area has been launched.
A bit of research has revealed that the 15-member Economic Community of West Africa States (ECOWAS) has been pursuing a common currency agenda centered on “Eco” with the motive of;
- Making it easier to do business within the West African Region.
2. Increase the overall trading activities among member states.
Macroeconomic conditions across countries of usage and the Covid-19 pandemic have delayed the implementation of the regional currency, with the new launch date set for 2027.
Come to think of it, will “Eco” be necessary in the post covid era, an era coupled with 1001 digital innovations, especially in the world of money? What if ECOWAS rethinks the design models of “Eco” to be something like a West African Digital Currency(WADC), will WADC command a level of trust within the region?
Olumide Adesina, a well-known Nigerian-based financial market analyst and a fellow member of Quantum Economics weighed in, saying that Ghana and Nigeria are having issues with “Eco” implementation because of the reliance of French-speaking countries on France for the management of the CFA franc and that has weighed in on the scalability of the “Eco”
France is still in the colonization business through the imposition of a monetary zone within Africa. Even as Africa tries to pull resources together to champion their own good, the leaders of France are doing all they can to maintain the status quo by trying to have their voices be factored into the implementation of “Eco”
The scale of businesses embracing blockchain technology is still growing, and the number of enterprises exploring blockchain tech is still expanding at a fast pace. If the ECOWAS region is to dump “Eco” and possibly consider its digital version, then they must take a cue from Nigeria’s CBDC experiment.
How has the e-naira fared so far? The adoption of the e-naira has been weak because of the anti-crypto stand by the Central Bank of Nigeria, thus negatively affecting the upscale effect among Nigerians who see the e-naira as a rival to the crypto market, says Olumide Adesina.
Out of a cumulative GDP of $724.7b of the ECOWAS region, Nigeria commands $440.83b, which is 60% of the GDP of the West African Region.
While Nigeria’s CBDC doing well may mean wide acceptance of any future proposed WADC, comparing Nigeria’s population to the regional population, a total failure of the e-naira as we are seeing may not do any good to any regional CBDC.
What do the people want?
45% of the Nigerian population owns cryptocurrency, which is about 90 million people. This number equals 3x and 5x the population of Ghana and Senegal respectively making West Africa’s largest economy the major leader within the space.
Anthony Nduka, the CEO of Alpha Blocks and the Lead Community Manager for Celo Nigeria, told me via WhatsApp that crypto has done the unimaginable by opening him up to global opportunities within a space of 3 years.
Ghana is also flexing its muscles, with over 700,000 of its 32 million people actively participating in the crypto space representing 2.16%of the total population. The need for crypto usage is expected to rise even as the economic woes of the country continue to worsen, and its currency continues to underperform against the major trading currencies.
Sir Kingsford, a Tarkwa-based young man who owns ESIGN TRADING VENTURES on Binance P2P, made it clear via WhatsApp that he earns GHC5000 per month trading crypto as a side hustle.
Samuel Ofori, a full-time Forex/Crypto educator made almost GHC600 a day in Dec. 2022 on GHC10000 trading crypto on P2P exchanges
A huge number of the population of Senegal is made up of young people who have an interest in emerging technology. The adoption of crypto will go a long way to reduce long lines in the bank and easy access to money from friends and families abroad.
“The demand for Bitcoin is so large in Senegal that it doesn’t matter how many exchanges you make” stated Nourou, a Senegalese Cryptopreneur
Conclusion
Bad economic management resulting in galloping inflation is pushing many Africans to Bitcoin and the world of decentralized finance, if the ECOWAS is to push anything CBDC, the Nigerian experiment has to succeed, but there is nothing positive to show of adoption even though we are still in the early days of implementation. If it fails, the Bitcoin standard might be the only way.
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This content is for educational purposes only. It does not constitute trading advice. Past performance does not indicate future results. Do not invest more than you can afford to lose. The author of this article may hold assets mentioned in the piece.
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