On Wednesday, May 20, 2020, the bill ratifying the end of the CFA franc was adopted in the Council of Ministers by the French government. This is a new step after the announcement made on December 21 by Emmanuel Macron and Alassane Ouattara. For 3 years now, this idea of switching to a new currency has been causing enough ink and saliva to flow. It was finally adopted after numerous negotiations between the eight member countries of the West African Economic and Monetary Union. What will really change with this new currency? We will do the overview in this article. So read to the end.
`` Formal '' changes announced
The changes announced are numerous. According to RFI, it is about the rupture of the “technical” links between the countries concerned, the Treasury and the Bank of France. France will no longer co-manage the West African currency with the states concerned, as has been the case since December 25, 1945 with the CFA franc. She will also leave all decision-making and management bodies of UEMOA. The Central Bank of West African States will no longer deposit half of its foreign exchange reserves with the Banque de France.
France still leads the game
However, Paris will continue to offer guarantees in the event of a monetary crisis. The new currency will always be pegged to the euro with a fixed parity. The objective of this principle is to guarantee the same value of the currency for consumers. France leaves the role of co-manager in a way for that of guarantor. But when you take a closer look, nothing will change in the daily life of coin users.
The caution of some ECOWAS countries
How long before the other ECOWAS states join the new currency? Even within ECOWAS some states are still reluctant to adopt the new currency. This is the case of Nigeria, which remains cautious and demanding. The Giant of the sub-region does not welcome the continued presence of France, which always wants to remain in control of the new currency whatever the future. diagrams of transitions from CFA franc to eco.
Eco or the disappointment of the West African population
What do Beninese think of this Eco reform?
After the announcement of the decisions taken by the heads of state of the UEMOA zone, some Beninese speak of a first decisive step which will lead to the shift of the CFA franc towards a common West African currency. A big step forward, but a lot remains to be done. On the other hand, for others, this announcement could lead to a division within the West African community. Many Beninese remain very suspicious of France's new function, which still remains in the monetary game. They believe that the fight continues and must lead to a total rupture.
Monetary reform under pressure and without pragmatism
Albin Feliho, President of the National Confederation of Employers of Benin (CONEB) believes that the announcement made by Presidents Emmanuel Macron and Alassane Ouattara is under pressure at the moment. According to him, it does not fully take into account the requirements of the large English-speaking ECOWAS countries such as Ghana and Nigeria, which are not members of UEMOA.
“A major regret is on convertibility. It is not possible to change the eco into Chinese yuan or even Kuwaiti dinar, and why not in sterling, without going through the euro ” deplores Albin Feliho.
The lack of eco convertibility is the basis of the feeling of the half-filled glass. For many observers, no deeply sovereignist advance has been made. The current process therefore risks giving birth to a mouse, a simple change of the name of the CFA franc.
The CFA Franc is perhaps living its last hours. The new ECO currency does not satisfy as it stands the vast majority of the West African population who would seemingly be caught in a new trap. But the process is not yet over. Actions have been announced in several countries of the sub-region against the neo CFA franc even before its birth.
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A curious, motivated and determined young leader, Obed Kodjo is an agronomist and blogger who is active in organizations that advocate the awareness and development of African youth. Innovation is his passion and for this he never ceases to cultivate himself in order to make a difference in his actions. He dreams of a conscious Africa that solves its problems on its own without outside help.