An agreement has been reached between France and West Africa’s monetary to rename its CFA franc the Eco and cut some of the financial links with Paris that have controlled the region’s common currency since its creation soon after World War Two.
Under the new deal, the currency’s name will change from CFA franc to Eco but it will still remain pegged to the euro, but the other bright side for the African countries is that they will no longer be obligated to keep 50% of their reserves in the French Treasury and there will no longer be a French representative on the currency union’s board.
The CFA have long been seen by critics as a mark from colonial times while proponents of the currency say it has provided financial stability in a sometimes turbulent region.
In a joint conference with President Macron Ivorian head of State Alassane Ouattara highlighted the historic nature of this development;
“This is a historic day for West Africa,” he said.
On his part, Macron highlighted the stabilizing benefits of the CFA but said it was up to African governments to determine the future of the currency.
“Yes, it’s the end of certain relics of the past. Yes, it’s progress… I do not want influence through guardianship, I do not want influence through intrusion. That’s not the century that’s being built today,” said Macron.
The CFA is used in 14 African countries with a combined population of about 150 million and $235 billion of gross domestic product.
However, the changes will only affect the West African form of the currency used by Benin, Burkina Faso, Guinea Bissau, Ivory Coast, Mali, Niger, Senegal and Togo – all former French colonies except Guinea Bissau.
The six countries using the Central African CFA are Cameroon, Chad, Central African Republic, Congo Republic, Equatorial Guinea and Gabon, – all former French colonies with the exception of Equatorial Guinea.
The agreement follows talks in Nigeria’s capital Abuja on Saturday between West African leaders. Countries in the CFA bloc and other West African nations such as Nigeria and Ghana have for decades debated creating their own currency to promote regional trade and investment.
The CFA franc was born in 1945 and at the time stood for “Colonies Francaises d’Afrique” (French Colonies in Africa).
It now stands for “Communaute Financiere Africaine” (African Financial Community) in West Africa and in Central Africa it means “Cooperation Financiere en Afrique Centrale” (Financial Cooperation in Central Africa).