Eight West African Nations Rename Their Common Currency to Eco

The eight countries that renamed their common currency to eco are Benin, Burkina Faso, Guinea- Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo. All the countries named here were once part of the French colonies except for Guinea- Bissau. These eight countries were having a common currency named ‘CFA franc’ which changed to ‘eco’ on Saturday. Though the common currencies were changing it was attached or were connected with Euros for at least 2 decades. 

It almost took more than 6 months to make the change in the currencies of the eight nations and finally in 2020, new common currencies ‘eco’ was introduced in these eight nations. The CFA franc currency was made in the year 1945 and it had a lot of interference by the French government even after they got their independence. This was announced when the French president visited Ivory Coast which is the highest cocoa producer in the world.

Changes Announced by Ivory Coast President and its Effect:

Along with the change in the currency, the Ivory Coast president also announced some of the changes that need to be implemented, and the changes are:

• To bring change in the currency name.
• As the French treasure always holds 50% of the total reserve when they had a common currency which was the CFA franc. But the president announced that this needs to be stopped and the French treasure should not be filled by 50% share of their total reserve.
• Earlier the French government used to interfere in the matters relating to currency but after the announcement of the new currency, the Ivory Coast’s president made it very clear that the French government should not interfere in the matters relating to the currency as the common currency has been changed. 
• Following the euro’s initiation 20 years ago, the CFA franc’s value has been anchored to the euro only at a fixed price of 655.96 CFA francs with one euro.
• The Bank de France retains 50% of said currency’s proven reserves, but this does not profit from its deposit stewardship, paying member states an annual maximum rate of interest of 0.75 percent.
• The agreement ensures unrestricted CFA franc to euro conversion and promotes intra-zone transactions.
• The Bank de France facility at Chamalieres, in the south of France, prints and mints CFA notes and coins.
• Many saw the CFA franc, which was introduced in 1945, as a proof of French meddling inside its former African colonies, yet after they gained independence.
• Economists believe they understand the rationale behind currency proposal, but they fear it is impractical and potentially harmful for the region’s economies, that are dominated through one nation, Nigeria, that contributes for two-third of the nation’s economic productivity.

Conclusion

Eight of the countries presently are using the CFA franc, which is linked to the euro & managed by the West African Monetary Unit, or WAMU.

The other seven ECOWAS nations, on the other hand, use their own currency, none of which are readily convertible.

The grouping claims to want the Eco in effect by 2020, but practically neither of the group’s 15 members now satisfy the requirements to join. 

The 5 anglophone nations inside the 15-member Economic Area of West African States (ECOWAS) which would like to adopt a new exchange rate on a sluggish timetable and also as a new currency again for entire region, but not as a substitute for CFA franc, have expressed their displeasure with the “eco’s” quick launch.