West African Countries Take a Step Away From Colonial-Era Currency

https://www.nytimes.com/2019/12/21/world/africa/west-africa-currency-france-franc.html

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DAKAR, Senegal — A bloc of West African states took a step away from a French-backed regional currency that dates back to the colonial era, making a significant symbolic break from the past.

The president of Ivory Coast, Alassane Ouattara, speaking at a joint news conference with the visiting president of France, Emmanuel Macron, said on Saturday that the bloc was changing the name of the C.F.A. franc, used in eight West African countries, and renaming it the Eco.

C.F.A. stood for the French Colonies of Africa when the then-colonial power introduced the currency in 1945, though it was changed after independence to the Financial Community of Africa. It is seen by many as a relic of “Françafrique,” the unofficial system under which France exerted influence over its former colonies in sub-Saharan Africa long after independence.

“This is a historic day for West Africa,” Mr. Ouattara said in the Ivorian capital, Abidjan.

Most of the criticism of the C.F.A. has centered around the requirement that the countries that use it are required to keep 50 percent of their foreign currency reserves in the French treasury. Under the agreement between France and the eight countries, this requirement will be scrapped when it becomes the Eco, as will the stipulation that a French representative sit on the currency union’s board.

Like its predecessor, the Eco will be pegged to the euro, which advocates of the C.F.A. said gave it stability.

Abolishing the C.F.A. franc has long been a demand of activists across the region. Opponents have demonstrated against the currency, which is seen as undermining African countries’ sovereignty, in Senegal, Cameroon, Togo and even France itself.

“It’s a question of dignity. We have to leave,” said Hady Ba, a Senegalese philosopher who has written about the C.F.A. He added, though, that the region did not have many “responsible governments” and so he was skeptical that this change would truly be in West African countries’ economic interests.

An Eco had already been in the works — but for a different, and larger, configuration of West African states. Fifteen West African countries were due to introduce a new currency called the Eco in 2020, but Mr. Ouattara’s announcement will almost certainly kill that project, according to Ndongo Samba Sylla, the author of “The Last Colonial Currency: The Franc C.F.A. Story.”

He said that in effect, the Ivorian president and the rest of the C.F.A. franc countries had “hijacked” the original Eco plan and, by keeping their currency pegged to the euro, had chosen to keep their French ties rather than establishing new ones with their West African neighbors.

Mr. Macron has made several visits to African countries during his tenure, frequently speaking out against the crimes of colonialism, and on Saturday he described it as a “grave mistake” on the part of the French Republic. The change from the C.F.A. to the Eco will likely improve his image on the African continent.

Today, there are two C.F.A. francs, one used in the eight West African countries and the other used in six Central African nations. Only the West African states will use the Eco.

Abolishing the requirement for countries’ foreign reserves to be kept in the French treasury and the departure of the French representative from the currency union’s board were “superficial” changes that had no impact on countries’ control of their own money, Mr. Sylla said.

“As we’re still pegged to the euro, we’ll have to have conservative monetary policy,” he said, adding that as he saw it, France still wielded significant power in the region through both the currency and its extensive military presence there.