IMF welcomes new currency ‘eco’ in West Africa
The eco will remain pegged to the euro, but the requirement that African nations using the CFA franc deposit 50 per cent of their foreign exchange reserves with the French treasury has been abolished
Kristalina Georgieva, managing director of the International Monetary Fund (IMF) has welcomed the end of the use of a long-disputed currency tied to French colonialism in West Africa.
French President Emmanuel Macron and Ivorian President Alassane Ouattara (pictured) announced at a press conference that France and the eight-nation West African Economic and Monetary Union (WAEMU) would replace the CFA franc in favour of a new currency called the “eco.”
During a three-day visit to Côte d’Ivoire, Macron told reporters that the reform was “a big step to write a new page in our relationship with Africa” and called colonialism “a grave mistake.”
Georgieva welcomed the reforms as constituting a “key step in the modernisation of long-standing arrangements between the West African Economic and Monetary Union and France.”
She added that the reforms maintain key elements of stability which have benefited the region, such as the fixed exchange rate with the euro and a guarantee of unlimited convertibility from France.
The eco will remain pegged to the euro, an arrangement previously championed by Outtara, who currently leads the WAEMU but the previous requirement that African nations using the CFA franc deposit 50 per cent of their foreign exchange reserves with the French treasury has been abolished.
France will also no longer hold a seat on the WAEMU-linked West African central bank.
The CFA franc encompasses 14 West and Central African nations.