8 West African Countries Replace CFA Franc With Eco Ending The Influence Of The Colonial Relic
Is the colonial era really over? If yes, why do the colonial masters still have a lot of influence on their colonies? Well, 8 West African nations are taking steps to get rid of the oldest colonial relic. The West African nations have agreed to rename the C.F.A franc to Eco. This was made known by the Alassane Ouattara, the president of Ivory Coast at a joint news conference that had Emmanuel Macron, the president of France in attendance. President Alassane Ouattara said,
“This is a historic day for West Africa.”
Breaking free from the French-backed regional currency is a significant move to step away from the past. By renaming the currency to the West African nations will also sever some financial ties to France. The meeting which held on Saturday 21st December marks a new beginning for the African nations. In reaction, the French president said,
“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.”
The C.F.A franc is used in 14 African countries. However, the change to Eco will only affect the West African version of the currency. Consequently, Togo, Senegal, Niger, Mali, Ivory Coast, Guinea Bissau, Burkina Faso, and Benin will transition to the Eco currency. With the exception of Guinea Bissau, all the rest are former French colonies.
The Significance of the Switch to Eco Currency
Until the transition to Eco currency, 14 African countries use the CFA franc. Thus, this translates to about 150 million people with a gross domestic product of $235 billion. Six other African countries use the Central African CFA. This includes Gabon, Equatorial Guinea, Congo Republic, Central African Republic, Chad, and Cameroon.
One of the requirements of the countries that use the CFA is to keep fifty percent of their foreign reserves in the French treasury. Also, a French representative is expected to sit on the currency union’s board. Activists criticized these requirements as unofficial systems that allowed France to continuously influence its former colonies.
When the Eco currency comes into use next year, these requirements will be scrapped. However, the Eco will still be pegged to the euro for stability. This has become another source of contention. Many are calling the currency change superficial since France still had significant power in the region through extensive military presence. According to Ndongo Samba Sylla, the author of ‘The Last Colonial Currency: The Franc C.R.A Story’,
“As we’re still pegged to the euro, we’ll have to have conservative monetary policy.”
Brief History of C.F.A and the African Continent
The C.F.A France was introduced in 1945 and was initially pegged to the French franc. At the time of its introduction, it stood for “Colonies Francaises d’Afrique” (French Colonies in Africa). However, the meaning has changed now. In Central Africa, it stands for “Cooperation Financiere en Afrique Centrale” (Financial Cooperation in Central Africa) while in West Africa it means “Communaute Financiere Africaine” (African Financial Community).
The currency remained stable and unchanged until 1994 when it was devalued by 50%. The reason for the devaluation was to boost export in the West African region. Following the devaluation, 1 French franc was equal to 100 CFA. However, when France became part of the Eurozone, 1 euro was equal to 656 CFA francs. The expectations are high on the Eco currency. However, do you think most African countries are old enough to control her destiny?