By Benjamin Tetteh
- Central Banks in West Africa want to rename its CFA Francs currency to ECO
- 15 West African countries use the CFA Francs
Central Banks in West Africa along with recent protests in the region have witnessed the public burning of CFA notes, with calls to drop that currency and rename it to ECO. CFA Francs are the African version of the French currency that critics claim refer to a colonial relic of France. The ECO has long been proposed as the region-wide single currency for the past decade. Since the CFA has remained legal tender for most of the former French colonies, France continues to keep up to 50% of their reserves, and they are not super interested in giving up those funds.
Why This Matters: Out of the fifteen West African countries who use the currency, eight trade with the CFA Francs. These countries have a combined population of about 150 million people, and $235 billion of gross domestic product. After the currency devaluation in 1994, 1 French franc was worth 100 CFA. Things got even worse when the French currency joined the eurozone, the fixed rate became 1 euro to 656 CFA francs.
Eight West African countries trade with the CFA Francs
The two biggest West African economies, Nigeria and Ghana have been the champions of a single currency. These two nations, together with the other English speaking countries created the West African Monetary Institute, to facilitate the creation of a common central bank and a single currency.
What’s Next: Some have interpreted the renaming as a superficial attempt by France to appease the growing opponents, while maintaining the status quo. Finance ministers in the region have requested an urgent meeting with the CFA zone countries, to discuss the way forward.
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