Since 1945, the CFA franc has been the currency used by French colonies, and the usage of the currency continued after independence. Benin President Patrice Talon revealed that the West African Monetary Union has unanimously agreed to take back control of its currency, withdrawing foreign reserves of the West African CFA from France. The move has been welcomed across the continent.
Benin Republic’s President Patrice Talon announced that the West African Monetary Union wanted to take back control of its currency. A unanimous agreement was reached by the eight African countries – whose foreign reserves are kept in France – to pull the reserves of their CFA franc from France. The countries which include Togo, Burkina Faso, Mali, Senegal, Ivory Coast, Niger and Guinea Bissau all use the French regulated francs.
The Franc which is used by 155 million people on the continent across 14 African countries is one of the colonial relics in many French colonised countries. This is the first time that a president has announced the withdrawal of the West African CFA Franc from France.
In 1958, Guinea’s President Ahmed Sekou Toure rejected the offer of then French Prime Minister Charles de Gaulle to approve a new French constitution for Guinea. A 95 per cent vote by Guineans wanted complete independence, including monetary independence. According to the New York Times, “Within one week, France pulled out all 4,000 colonial servants – administrators, doctors, judges, technicians and teachers. Departing civil servants burned blueprints, archives and machinery manuals.”
President Talon said, “we now unanimously agree that this model needs to end. The Central Bank of the West African Monetary Union will manage all of the currency reserves and will dispatch them to the different partner central banks across the world.”
The CFA is divided into two, the Economic and Monetary Community of Central Africa (CEMAC) which includes Chad, Cameroon, Central African Republic, Gabon, Equatorial Guinea and Republic of Congo. And the West African Economic and Monetary Union (WAEMU) which includes Senegal, Guinea-Bissau, Mali, Ivory Coast, Burkina Faso, Togo, Benin Republic, and Niger.
The CFA franc was created in 1945 after the 1944 Brettons Wood Agreement which saw the world usher in a new global monetary system with the U.S dollar replacing the gold standard. The Brettons Wood agreement cemented America’s dominance as a world economic power. The CFA franc is tied to the Euro, and follows the fluctuation of the Euro. The creation of Eco, the newly proposed West African currency designed to replace the CFA franc by 2020 led to an official separation with the Euro.
The CFA franc has always been condemned for its representation of neo-colonialism. This new announcement has been received with positive reactions and paves the way for further integration of the continent.