The CFA Franc : A currency by any other name?
As 2019 drew to a close, West Africa’s Economic and Monetary Union (WAEMU) and France announced the renaming of the CFA Franc — their common currency — as the Eco. The announcement elicited responses ranging from excitement and anticipation to confusion and anger. Anglophone member states of the ECO...
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| Language: | English |
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2020
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| Online Access: | https://hdl.handle.net/10356/142630 |
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| Institution: | Nanyang Technological University |
| Language: | English |
| Summary: | As 2019 drew to a close, West Africa’s Economic and Monetary Union (WAEMU) and France announced the renaming of the CFA Franc — their common currency — as the Eco. The announcement elicited responses ranging from excitement and anticipation to confusion and anger. Anglophone member states of the ECOWAS (Economic Community of West African States), having announced plans to adopt a common currency unit of the same name, were caught off-guard.
The announcement lacked clarity, both on practical and symbolic issues. What role would the new currency play? When would it become operational? How would it roll out (likely 2H20)? Was it a pragmatic step in severing colonial ties or merely political optics designed to garner populist support? Did the move open a new chapter in Francophone / Anglophone and Francophone / French relations? With so many questions unanswered, investors do now know what to make of the Eco, or how to prepare for it. What could have been a landmark for the region has instead become a source of confusion, mistrust and apathy.This article unpacks five key questions:
1. Is this move merely cosmetic, or is there more than meets the eye?
2. What does the new Eco mean for regional monetary policy and its independence?
3. How might the Eco impact trade and other relations among WAEMU and France and Anglophone ECOWAS states, and what are the potential benefits and risks for business?
4. Can political will and economic consensus within the region hold and improve its bargaining and political position, or could divergent interests potentially lead to economic fallout amongst members?
5. Where to from here and what might the next decade look like for the Eco? |
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