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West African countries changes common currency


Syed Umarullah HussainiWeb Editor

23rd Dec, 2019. 11:10 am
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West

At least Eight West African countries decided collectively to change the name of their common currency in a move to strengthen economic ties.

According to the details, countries decided to change the name of their common currency to Eco and severed the CFA franc’s (former currency) links to former colonial ruler France.

The CFA franc was initially pegged to the French franc and has been linked to the euro for about two decades.

Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo currently use the currency.

All the countries are former French colonies with the exception of Guinea-Bissau.

Macron Visit to Ivory Coast

However, this collective decision made after the visit of French President Emanuel Macron to Ivory Coast

Ivory Coast, the world’s top cocoa producer and France’s former main colony in West Africa.

Macron hailed it as a “historic reform”, adding: “The Eco will see the light of day in 2020.”

President Ivory Coast Alassane Ouattara, speaking in the country’s economic capital Abidjan, announced “three major changes”.

These included “a change of name” of the currency, he said,

The deal took six months in the making.

The CFA franc’s value moored to euro after its introduction at a fixed rate of 655.96 CFA francs to one euro.

Although The Bank of France holds half of the currency’s total reserves.

But France does not make money on its deposits stewardship, annually paying a ceiling interest rate of 0.75 percent to member states.

Furthermore, The arrangement guarantees unlimited convertibility of CFA francs into euros and facilitates inter-zone transfers.

CFA notes and coins printed and minted at a Bank of France facility in the southern town of Chamalieres.

The CFA franc, created in 1945, seen by many as a sign of French interference in its former African colonies.

The Economic Community of West African States regional bloc urged members to push on with efforts to establish a common currency.

Moreover, the bloc insists it is aiming to have the Eco in place in 2020.

But almost none of the 15 countries in the group currently meet criteria to join.

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