Eight West African nations rename common currency to Eco

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News:Recently, eight West African nations have agreed to change the name of their common currency from ‘CFA franc’ to ‘Eco’.

Facts:

Which are the countries that uses CFA Franc?

  • CFA Franc is the name of two currencies- ‘the West African CFA franc’, which is used in 8 West African countries and ‘Central African CFA franc’, which is used in 6 Central African countries. 
  • Both currencies are guaranteed by French treasury and was created in 1945. 
  • However,the currency is seen by many as a sign of French interference in its former African colonies even after countries became independent.

What was the decision?

  • The eight West African namely Ivory Coast, Mali, Burkina Faso, Benin, Niger, Senegal, Togo and Guinea-Bissau have agreed to change the name of their common currency from ‘CFA franc’ to ‘Eco’.
  • All these countries except Guinea-Bissau are the former French colonies.
  • This decision was taken after Economic Community of West African States(ECOWAS) had urged members to push on with efforts to establish a common currency to be launched in 2020.
  • Further,the countries have also decided that Eco will remain pegged to the euro but the African countries in the bloc won’t have to keep 50% of their reserves in the French Treasury and there will no longer be a French representative on the currency union’s board.

Additional information:

About ECOWAS:

  • Economic Community of West African States (ECOWAS) was established in 1975 by the Treaty of Lagos.It is considered as one of the pillars of the African Economic Community, 
  • It is a 15-member regional group with a mandate of promoting economic integration in all fields of activity of the constituting countries.
  • The member countries are Benin, Burkina Faso, Cape Verde, Côte d’ Ivoire, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Sierra Leone, Senegal and Togo
  • It was set up to foster the ideal of collective self-sufficiency for its member states.As a trading union,it is also meant to create a single, large trading bloc through economic cooperation.