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The Council of Ministers of Côte d'Ivoire adopted on January 6, 2021, a bill authorizing President Alassane Ouattara to ratify the Cooperation Agreement between France’s government and the governments of the West African Monetary Union (WAMU)[1] member states, as part of the implementation of the common currency “Eco” announced to replace the CFA Franc in the sub-region.
This CFA franc reform project was jointly announced on December 21, 2019, by Ivorian President Alassane Ouattara and his French counterpart Emmanuel Macron, while a project to create a common ECOWAS currency was under consideration by the conference of 15 heads of state from the region. But the effective implementation of this new currency - also known as the Eco - did not take place in 2020 as desired.
During 2019, the authorities of the WAMU expressed their wish to see the functioning of their monetary cooperation with France evolve. The objective was to achieve a reform contributing to the modernization of the WAMU, but also facilitating its gradual extension to the seven other countries of the Economic Community of West African States ECOWAS.[2]
Subsequently , discussions between France and its African partners of the WAMU resulted in the following common proposal to reform the bodies and the functioning of their cooperation:
(i) The change of name of the currency, with the WAMU authorities indicating their wish to change from "CFA franc" (XOF) to "ECO";
(ii) The elimination of BCEAO’s[3] requirement to deposit half of its reserves in the French Treasury’s operations account;
(iii) The withdrawal of France from governance bodies in the Area.[4]
Thus, France's positioning is evolving to become that of a strict financial guarantor of the Area as these measures aim to reduce France’s influence in the Francophone countries.However, it's worth noting that the fundamental parameters of cooperation have not been modified:
- The exchange rate regime remains unchanged, with the maintenance of the fixed parity between the euro and the currency of the Union, the ECO, like the outgoing CFA, will have a fixed exchange rate of 655.957 to the euro.
- Euro will continue to guarantee the Eco's convertibility and stability provided by France.
The Agreement was signed by the French Minister of the Economy and Finance and by all the Finance Ministers of the WAMU member states in December 2019, replacing the previous cooperation agreement signed in December 1973.
The Cooperation Agreement between France’s government and the governments of the West African Monetary Union (WAMU) states members- PDF
