The West Africa’s monetary union has agreed with France to rename its CFA franc the Eco and cut some of the financial links with Paris that have underpinned the region’s common currency since its creation soon World War Two.
Under the deal, the Eco will remain pegged to the euro but the African countries in the bloc won’t have to keep 50% of their reserves in the French Treasury and there would no longer be a French representative on the currency union’s board.
Critics of the CFA have long seen it as a relic from colonial times while proponents of the currency say it has provided financial stability in a sometimes turbulent region.
“This is a historic day for West Africa,” Ivory Coast’s President Alassane Ouattara said during a news conference with French President Emmanuel Macron in the country’s main city Abidjan.
In 2017, Macron highlighted the stabilising 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.
According to Reuters, 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.