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