Paris (AFP)
France officially ratified the end of the CFA franc on Wednesday, which should henceforth be called the Eco, but without renouncing its financial commitment in Africa at a time when the continent is hit by the coronavirus crisis.
"France's role is evolving to become that of a strict financial guarantor for the area", explained the Minister for Foreign Affairs, Jean-Yves Le Drian. "The commitments are kept and we are there," he said during a hearing Wednesday afternoon before the Foreign Affairs Committee of the National Assembly.
"This symbolic end was to be part of a renewal of the relationship between France and Africa and write a new page in our history," said government spokeswoman Sibeth Ndiaye, after approval by the Council of ministers of a bill that gives the green light to the transformation of the CFA franc.
"This is the concrete implementation of the agreement of December 21," announced by Ivorian President Alassane Ouattara, in the presence of his French counterpart Emmanuel Macron, who launched this reform of the CFA franc, explained to AFP a French source.
The bill thus brings the ratification in French law of the transformation of this currency, often denounced by its opponents as "colonialist" and which the French president recognized that it was "perceived as one of the vestiges of Françafrique" .
Concretely, the eight West African countries will now have to decide whether this new currency is called Eco as initially planned.
Thanks to this agreement, the Central Bank of West African States (BCEAO) will no longer have to deposit half of its foreign exchange reserves with the French Treasury, an obligation that was perceived as a humiliating dependence on France by critics of the CFA franc.
Another important difference: Paris is withdrawing from the governance bodies in which it was present. So far, the Minister of Finance and the Governor of the Banque de France have participated in two annual meetings, one of which was held in Paris.
On the other hand, France will continue to play its role of guarantor for this currency which will also maintain a fixed parity with the euro (1 euro = 655.96 CFA francs). This point is likely to change when the common West African currency is born.
- A "constant" concern
This change comes at a time when France is pleading internationally for support to African countries, which are suffering the full brunt of the economic crisis caused by the coronavirus.
In addition to falling oil and commodity prices, Africa is also facing mistrust from investors who are falling back on safer markets.
"Africa remains one of our constant concerns," Finance Minister Bruno the Mayor said on Tuesday at a hearing in the National Assembly, adding that he planned to support the countries of the continent "through the International Monetary Fund".
Since the start of the crisis, Paris has also been very active in the G20, including obtaining a moratorium on the payment of debt service this year for the 77 poorest countries a month ago.
Mali was the first African country to benefit from this measure on Tuesday from Paris Club creditors. Others are expected to follow, such as Ethiopia, the Democratic Republic of the Congo, Congo-Brazzaville, Cameroon and Mauritania.
Regarding the new Eco, it remains to be seen whether this currency will subsequently spread to all the fifteen member countries of the Community of West African States (Cédeao).
Before the announcement of the end of the CFA franc, these states had agreed to launch a common currency this year which would also be called Eco.
The reform of the CFA franc was negotiated throughout the second half of 2019 between France and the eight countries of the West African Economic and Monetary Union (UEMOA): Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali , Niger, Senegal and Togo.
But the CFA franc does not disappear completely: the six countries of Central Africa (Cameroon, Central African Republic, Congo, Gabon, Equatorial Guinea and Chad), which form a separate monetary zone, will continue to use it.
© 2020 AFP