Eight West African countries rename common currency to Eco
The eight West African nations have agreed to change the name of their common currency from ‘CFA franc’ to ‘Eco’, after they jointly severed the CFA franc’s links to former colonial ruler France. The announcement was made during a visit by French President Emmanuel Macron to Ivory Coast, who hailed the decision as a historic reform. Even though the deal took six months in making, common currency Eco will see the light of day in 2020.
The 8 West African countries namely- Ivory Coast, Mali, Burkina Faso, Benin, Niger, Senegal, Togo and Guinea-Bissau currently use CFA France as their currency. All these countries, except Guinea-Bissau, are former French colonies.
The CFA franc was initially pegged to French franc and has been linked to euro for about two decades. The common currency Eco will see the light of day in 2020. However, the Ivory Coast President announced the three major changes, which included- (1) a change of name of the currency; (2) stopping holding 50% of reserves in French Treasury; (3) withdrawal of French governance in any aspect related to the currency.
About CFA franc
It is the name of two currencies- ‘the West African CFA franc’, which is used in 8 West African countries, and ‘Central African CFA franc’, which is used in 6 Central African countries. Both currencies are guaranteed by French treasury and was created in 1945. The currency was seen by many as a sign of French interference in its former African colonies even after countries became independent.
NOTE: Ivory Coast is the world’s top cocoa producer as well as France’s former main colony in West Africa.
Category: International Current Affairs