ECOWAS: from CFA Franc to Eco, from economic to politic

Alassane Ouattara and Emmnanuel Macron rather for an Eco with fixed parity with the Euro.

The news went around social networks.  Guinea Conakry and the 5 English-speaking countries of West Africa denounce the “unilateral” decision to rename the CFA franc to “eco” on the sidelines of a meeting held on Thursday January 16 in Nigeria. The six countries of the West African Monetary Zone (WAMZ) « noted with concern the declaration aiming to unilaterally rename the CFA franc to eco by July 2020 ».

Finance ministers and central bank governors of the six countries say in a statement that « this action is not in accordance with the decisions » of the Economic Community of West African States (ECOWAS) in view of « adopting the eco as the name of the single currency » for the entire region. This information revives the debate around a currency supposed to unite the 15 ECOWAS countries from 2020.

As a reminder, the 8 countries of the West African Economic and Monetary Union (WAEMU), which present macroeconomic profiles in accordance with the convergence criteria defined within the framework of this currency, were the first to announce, on December 21, 2019, by the voice of Ivorian Alassane Ouattara, President in office of the Union, their decision to join the common currency. The announcement made as part of a bilateral summit between Emmanuel Macron and Alassane Ouattara, on the sidelines of a signing ceremony between UEMOA and France, symbolically marking the end of the CFA Franc agreements, has sparked a lot of debate .

If the officials speak of a « historic development », the anti-CFA activists, they evoke a sham while the economists denounce the evocation of an « Eco with fixed parity » instead of the « Eco flexible » decided by ECOWAS. This major ECOWAS political crisis is blessed bread for a large country like Nigeria, still far from the convergence criteria and unwilling to abandon its national currency, the Naira, and countries like Ghana, Liberia and Sierra Leone , subscribed to Olympic record inflation rates.

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