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Revealed: All You Need to Know About the Characteristics of the ‘Eco’, the Currency that will Replace the FCFA in 2020

Next to Emmanuel Macron, the Ivorian president, Alassane Ouattara, officially announced, on Saturday December 21, an agreement between the West African Economic Union (Uemoa) and France for a deep reform of the CFA franc which is now going to the ‘Eco in 2020.

The CFA franc, created in 1945, meant “franc of the French colonies in Africa”. It evolved after the independence of the 1960s to become “franc of the African Financial Community”, for the eight countries of West Africa (Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo).

Used since colonial times by eight West African countries (and six Central African countries not affected by the reform), and much criticized by African youth, this currency will be replaced by the eco.

The eco, name chosen for the future single currency of the 15 countries of the Economic Community of West African States (ECOWAS) is intended to be a reform of the Fcfa. Emmanuel Macron’s Élysée Palace explains this.

The eco announces the “End of the deposit of foreign exchange reserves in France”, he announced. Indeed, the Central Bank of West African States (BCEAO) so far with the FCFA must deposit half of its foreign exchange reserves with the Banque de France.

The BCEAO “will no longer have any particular obligation in the future regarding the investment of its foreign exchange reserves”, according to the French presidency. “She will be free to invest her assets in the assets of her choice”.

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On the governance side, “France will no longer appoint any representative to the Board of Directors and the BCEAO Monetary Policy Committee, nor to the WAMU Banking Commission,” explained the Élysée in a context where the country had French representatives in the governance bodies of UMOA.

For his part, the Ivorian president, Alassane Ouattara supports this initiative judged for the “economic development” of African states. “With the maintenance of this guarantee, while waiting for the eco, we want to avoid speculation and the flight of capital,” he said.

These changes would aim to “defuse the criticism”, according to which France continued to dictate its decisions in African bodies via its representatives, defends the presidency of Emmanuel Macron. Except, that… Question: What does France gain in this new hub which obviously excites it than usual?

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Written by How Africa

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