Standing next to French President Emmanuel Macron, Ivorian President Ouattara announced on December 21 the end of the CFA franc which will be replaced by the new currency ECO.
Benin, Burkina Faso, Ivory Coast, Mali, Niger, Senegal and Togo, all former French colonies, currently use the CFA.
The introduction of ECO will mean the end of technical ties with the French treasury and these countries will manage the new currency themselves without interference from France.
“By an agreement with the other UEMOA heads of state, we decided to reform the CFA franc with the following three major changes: first, the change of the name of the currency from CFA franc to eco.
Secondly, the end of the centralization of 50% of our foreign exchange reserves at the Treasury and the closure of the operating account.
Third, the withdrawal of representatives of France from all the WAEMU decision-making and management bodies.” Ouattara announced
With the CFA, there was the obligation to pay 50% of currency reserves to the famous operating account of the French treasury.
RFI analyses ECO will keep a fixed parity with the euro, which guarantees the same value of the currency for its consumers. The value may evolve over time but France still plays a major role in case of crisis.
If the countries of the eco zone no longer have enough to pay for their imports, France will assist. The media analyses that Paris still reserves the right as a decision-making body in the monetary policy of the council.
Ultimately, she moves from a role of co-manager of the CFA to the role of guarantor in ECO and still maintains a special economic relationship with her former colonies
French president Emmanuel Macron hailed the move as a “historic reform”, adding that the Eco will see the light of day in 2020.
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