The debate on why some French speaking African nations like Cameroon still use the FCFA currency has been raging on for decades now. With the recent turn of events however, can we say the debate may soon become a thing of the past?.
Yesterday, Ivorian President, Allasane Ouattara made a ground-breaking announcement in the presence of French president, Emmanuel Macron, noting that the ECO is set to replace the FCFA as currency.
“By an agreement with the other UEMOA [West African Economic and Monetary Union] heads of state, we decided to reform the CFA franc with the following three major changes” the Ivorian leader said.
“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” he went on.
The third Allasane added, is ” the withdrawal of representatives of France from all the WAEMU [West African Economic and Monetary Union] decision-making and management bodies”.
To President Allasane, yesterday was ” a historic day for West Africa” due to the move.
President Macron on his part has lauded the “historic reform” expected to begin materialising next year.
No official action has been made so far and no other nation (Cameroon inclusive) has officially confirmed or condemned the move. If adopted however, experts say France will move from a co-manager of the CFA to being the guarantor in ECO, still maintaining a special economic relationship with her former colonies.
According to the New York times, “like its predecessor, the Eco will be pegged to the euro, which advocates of the C.F.A. said gave it stability”.
While some say the move will help African Nations currently using the FCFA as they will no longer be obliged to pay a percentage of currency reserves to the French treasury, others say the only move that will truly benefit the countries will be completely cutting off all ties with the French treasury and managing the new currency without interference from France.