Eight West African countries have renamed a French-backed regional currency that dates back to the colonial era.
The CFA franc — a currency pegged to the euro that is used throughout Francophone West Africa — will be renamed the eco, The New York Times reports.
Fourteen African countries including 12 former French colonies have been using the CFA franc, at least since the late 1940s.
According to the colonial-era policy, France held 50 percent of the foreign reserves of the eight countries amounting to around $500 billion each year, according to Mediapart.
These compulsory deposits, considered by Africans to be colonial taxes, will come to an end in 2020 when the currency is officially renamed.
Ivory Coast President Alassane Ouattara and France President Emmanuel Macron announced the changes at a joint news conference in Abidjan on Dec. 21, according to The New York Times.
Macron has visited Africa on four occasions in the last few years. He visited Burkina Faso, Ghana and Ivory Coast in November 2017 and Tunisia in February 2018. In March 2019, Macron visited Djibouti, Ethiopia and Kenya. His latest trip to Africa in December took him to Ivory Coast and Niger.
These trips underscore the importance of Africa in his foreign policy, according to News24.
At the news conference to announce the changes to the CFA franc, Macron described colonialism as a “grave mistake” on the part of France.
France originally created the CFA franc in the late 1940s to serve as a legal tender in its then-African colonies.
Some argue that France’s control over the CFA franc ensures financial stability within the region. Others say that the currency is an unnecessary colonial relic that stalls economic development in the individual countries and the region as a whole.
There are two CFA francs. One is used in the eight West African countries and the other is used in six Central African countries. Only the West African countries will use the eco.
Like its predecessor, the eco will be pegged to the Euro to ensure stability, according to Euronews.
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The colonial-era requirement to have a French representative sitting on the currency union’s board will also be scrapped, a move designed to support regional autonomy for the eco.
Senegalese economist Ndongo Samba Sylla has long advocated for the elimination of the CFA franc. He argues that the eco’s link to the Euro still keeps the West African countries from achieving true autonomy.
“As we’re still pegged to the euro, we’ll have to have conservative monetary policy,” said Sylla.
