8 Francophone countries get new currency

It is official that the Eco will replace the CFA franc as the new currency for the eight Francophone countries that form the West African Economic and Monetary Union (UEMOA).

France's Council of Ministers officially passed a bill earlier this month that ratified the reform of the monetary agreement that bound the French government to the eight member states.

Doing so brought to a close 75 years of rule by the French Republic in which the states had been compelled to centralize- to deposit- their foreign exchange reserves in the Banque de France, otherwise known as the French Treasury.

Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo will now pool their reserves entirely within the Central Bank of West African States, or BCEAO.
The Eco will remain pegged to the Euro and will be backed by the French Treasury. The euro will guarantee the Eco's convertibility and stability, with the Treasury remaining as guarantor for all eight UEMOA states.

The Eco will have a fixed exchange rate of 655.957 to the euro.

The CFA franc, or Communaute francaise d'Afrique, has been in use since 1945 and was created in the wake of the weakness of the franc after World War II. Initially tied to the franc, it has been linked to the euro since that currency's inception.

Although adopting their own currency had been West Africa's goal for decades, it was last July 1 the UEMOA member countries announced their strong intent to stop using the CFA franc and start using the Eco.

Oddly enough, the Eco is expected to be adopted by member states July 1.

The French government will also withdraw its presence from all West African governing bodies with whom it had been involved, such as the BCEAO.

The...