The much-awaited bill ratifying the end of the CFA franc was adopted on Wednesday by the French Council of Ministers.
The text validates the transition of the CFA franc – used by eight French West African countries – to become the newly mooted Eco, a currency to be adopted by the entire West African bloc, ECOWAS.
It also marks the end of the centralization of foreign exchange reserves of the eight West African states with the French Treasury. In concrete terms, the Central Bank of West African States will no longer have to deposit half of its foreign exchange reserves with the Bank of France.
France will also have to withdraw its presence from the governance bodies. The fixed parity of the future Eco currency with the euro will have to be maintained. Eight countries concerned are: Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. Critics of the CFA franc perceive it as one of the last vestiges of France’s colonial domination. The Central African version of the currency, XAF, however; continues to be used in six countries across the region.
About the twin CFAs
The CFA franc, its initials come from the French words for African Financial Community, was launched on December 26, 1945 as a “franc of the French colonies of Africa.”
Fourteen nations, divided into West and Central African groups, use the currency today. Their 155 million people account for 14 percent of Africa’s population and 12 percent of its GDP, according to the International Monetary Fund (IMF).
Two different CFA Franc users. Eight countries comprise the West African Monetary Union (WAMU), Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo. Its Dakar-based issuing authority is the Central Bank of the West African States (CBWAS).
Six others are in the Central African Economic and Monetary Union (CAEMU): Cameroon, the Central African Republic, Chad, Equatorial Guinea, Gabon and Republic of Congo. Its issuing authority is the Cameroon-based Bank of the Central African States (BCAS).