West African states to halt use of CFA Franc and adopt single currency ECO

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West Africa’s monetary union has agreed with France to rename its CFA franc the Eco and cut some of the financial links with Paris that have underpinned the region’s common currency since its creation soon World War Two.

Under the deal, the Eco will remain pegged to the euro but the African countries in the bloc won’t have to keep 50% of their reserves in the French Treasury and there will no longer be a French representative on the currency union’s board.

This latest announcement has been received with positive reactions and paves the way for further integration of the continent.

Supporters of a single currency say it will facilitate trade, lower transaction costs and payments amongst ECOWAS’ 385 million people.

The Eco is expected to be adopted in 2020.The target launch date for the regional bloc of countries in West Africa’s single currency has been postponed several times; in 2005, 2010 and 2014; since the concept first arose in 2003.

Critics of the CFA have long seen it as a relic from colonial times while proponents of the currency say it has provided financial stability in a sometimes turbulent region.

The CFA is used in 14 African countries with a combined population of about 150 million and $235 billion of gross domestic product.

However, the changes will only affect the West African form of the currency used by Benin, Burkina Faso, Guinea Bissau, Ivory Coast, Mali, Niger, Senegal and Togo – all former French colonies except Guinea Bissau.

Via Africanews

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