France has ratified yesterday the Monetary Accord achieved a year ago with the West African Economic and Monetary Union .
As one of the steps toward the creation of the ECO, a monetary unit to be used eventually by 15 West African countries, the French Government agreed not to require any longer that the Francophone countries of the WAEMU keep half of their reserves with the French Treasury, to relinquish the seat that Banque de France has at the board of the Banque Centrale des États de l’Afrique de l’Ouest and the two seats reserved to the Governor of the Banque de France and the French Finance Minister in the WAEMU meetings, which take place every six months.
The French Government will keep guaranteeing the parity 1 euro = 655,96 ECO (CFA) francs.
The name CFA which originally meant “Colonies françaises d’Afrique” was changed in 1961 to “Communauté Financière Africaine”, and now it will be called “eco”.
There is a long road for the eco to become the currency of all 15 members the WAEMU. It would be necessary to create a Central Bank, and to adjust the economies of the Anglophone countries to a monetary stability that does not exist now. To have an idea of the proportion of the economies of the Francophone countries of the area, just Nigeria represents 60% of the region’s population and 65% of its GDP.
It is to be expected that new banknotes denominated in ecos will be issued by the BCEAO.
Courtesy: Cleophas Schockem
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