The West African monetary union renamed its common currency the CFA Franc to the Eco. This marked the bloc’s weakening financial ties with its erstwhile colonizer France. Even since their independence from France, West African economies were following the financial ties, which necessitated keeping 50% of their reserves with Bank of France to be disbursed to member countries under certain conditions. West Africans claim that so far US$ 500 billion must have been parked with Bank of France. But the data relating to disbursement is not yet known.
The Eco will keep its new currency pegged to the euro. But the mandatory requirement of keeping 50% of their reserves in the French Treasury is dispensed with. This was announced by Ivory Coast’s President Alassane Ouattara during a press conference in the capital Abidjan.
As a sequel to his development, France will not have a representative on the board of West Africa’s central bank. Importantly, French President Emmanuel Macron was on a two-day visit to Western Africa recently.
West Africa’s CFA Franc, was created by former French President Charles De Gaulle in 1945 as a relic of the region’s colonial past. However, Macron said that his country would play a role in the Eco by ‘guaranteeing its economic stability.’ Eco to be launched in 2020 will be used by eight West African countries, including Benin, Burkina Faso, Guinea Bissau, Ivory Coast, Mali, Niger, Senegal and Togo. These countries have a combined GDP of around US$108.5billion, and a population of 101.8million. However, the old currency (CFA Franc) will remain in use in a six-nation economic zone in Central Africa consisting of former colonies Cameroon, Chad, Central African Republic, Congo Republic and Gabon. It will also be used in Equatorial Guinea.
