Quote: "zenapt"... CFA coins which is strictly controlled by the French Treasury ...
Things are
changing
With the abandonment of the CFA franc, a page turns in West Africa
We will never call him CFA franc again. This currency, created in 1945 and which remains perceived in Africa as a symbol of the colonial link, will disappear in 2020 from eight West African countries (Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo) in favor of a new currency, the eco.
The reform was announced on Saturday December 21 by Ivorian President Alassane Ouattara, current president of the West African Economic and Monetary Union (UEMOA), while receiving his French counterpart Emmanuel Macron. Alassane Ouattara spoke of a "historic day". "Too often France today is perceived" as having "a look of hegemony and the tinsel of colonialism which was a profound error, a fault of the Republic", for his part declared Emmanuel Macron, wishing " build a new relationship, both passionate and uninhibited "with West Africa.
The CFA franc will remain in force in Cameroon, the Central African Republic, the Congo, Gabon, Equatorial Guinea, and Chad. But a similar development is also taking shape in this area: it is therefore the final end of the CFA franc which is beginning.
1 / Why the end of the CFA franc?
The CFA franc has long been the subject of much debate in Africa. This currency is pegged to the European currency at the fixed rate of 655 CFA for one euro. It is a source of stability: it limits inflation, facilitates regional trade and reassures external investors by eliminating exchange risk. But some economists also believe that by prohibiting devaluations, the CFA franc has slowed the development of French-speaking Africa, less dynamic than the English-speaking countries of the continent.
Above all, the CFA franc suffers from its name and its past. This currency remains seen as the symbol of the trusteeship, by France, of its former colonies. In recent years, opposition movements have taken up this theme. A change of name had become almost compulsory.
2 / What will change?
The reform goes further than the cosmetic aspect. The name change is accompanied by important technical measures: West African countries will no longer need to transfer 50% of their foreign currency reserves to the Banque de France. Under the old monetary agreements, they had this obligation, very badly perceived in Africa.
The new agreements, signed on Saturday December 21 by Bruno Le Maire and his Ivorian counterpart, also provide for the withdrawal of French representatives from all the management bodies of the West African franc zone: France will no longer sit on the board of directors or the monetary policy committee of the West African central bank, located in Dakar.
With this reform, France therefore ceases to ensure co-management of the West African franc zone. But it will remain the guarantor of the new currency. In fact, initially, the eco will maintain a fixed parity against the euro and Paris will continue to guarantee the convertibility of the eco, as it did for the CFA franc.
In doing so, it is a question of ensuring the transition to the new currency by maintaining a privileged link with this region, while accompanying the change. The project to launch the eco is supported by the 15 states of the ECOWAS (Economic Community of West African States).
Initially, the eight states with the CFA franc shared will switch to eco. Then the eco zone should open up to its neighbors, including Nigeria, the African economic giant. However, it remains difficult to predict the date of these enlargements, as the new currency is still only in the planning stage and has yet to gain the confidence of its future users.
3 / What is the French footprint still in Africa?
In West Africa, French economic interests are not negligible, even if France has been supplanted by Germany for two years as the leading European supplier. We find on the continent the big names of French industry with the presence of Areva in uranium in Niger which covers 100% of our military needs and 30% of our civilian needs, Total, Bolloré, Vinci and Bouygues.
There are 110,000 French people living in French-speaking Africa, an area where the French language retains its influence. This number has dropped by 20% in two decades and represents only 8% of French people living in the world. These French Africans are no longer mostly expatriates, that is to say employees of private companies or administrations, but rather binationals. In Côte d'Ivoire, French residents of Abidjan or Bouaké are mostly dual nationals, their other nationality being Lebanese or Ivorian.
These French nationals in West Africa may be exposed to the risks of political instability or kidnapping. The French army present in the area has developed know-how in terms of protection which can benefit all nationals of member countries of the European Union. It has three "presence forces" in West Africa: in Senegal, with 350 men; in Côte d'Ivoire, with the 900 men of the 43rd Marine Infantry Battalion (Bima) positioned in Port Boüet; in Gabon, where 350 men can notably provide aeronautical logistics support.
