by Aly Jonas

Mali, Niger, Burkina Faso, the essential bet on a common currency

Mali, Niger, Burkina Faso, le pari indispensable de monnaie commune

On February 11, 2024, General Abdourahmane Tiani, head of the military junta in Niger, discussed the potential creation of a common currency with Burkina Faso and Mali. This proposal raises questions about the conditions necessary for the success of such an initiative.

The common currency project between Burkina Faso, Mali and Niger has attracted interest since General Abdourahmane Tiani, head of the military junta in Niger, raised the possibility in February 2024. This proposal comes in a context of changes political and economic in the region, with the three member countries of the Alliance of Sahel States (AES) led by military regimes. However, for this initiative to be successful, several conditions must be met.

First, close coordination of macroeconomic and fiscal policies is essential to ensure the stability of the new currency and prevent trade imbalances. Next, the establishment of solid monetary management institutions, such as a common central bank, is essential to guarantee a stable and independent monetary policy. Furthermore, the establishment of an integrated common market would promote economic growth and strengthen regional cooperation. Finally, crisis monitoring and resolution mechanisms are necessary to deal with internal and external shocks.

However, it is difficult to determine whether these conditions are fully met in the three countries concerned. Although members of the West African Economic and Monetary Union (UEMOA) since 1963, challenges remain, particularly in terms of coordination of government policies and macroeconomic stability.

Despite potential risks, such as possible disruption of trade and fragmentation of existing economic blocs, the initiative to create a new currency could offer significant benefits, including greater regional integration and increased independence from vis-à-vis external partners. However, careful planning, effective coordination and transparent communication will be essential to ensure the success of this endeavor and avoid isolation of the three countries.