English-Speaking West African Countries Say Renaming of CFA Franc Was Unilateral

(Bloomberg) --

The West African Monetary Zone, comprising English-speaking West African countries and Guinea, described the decision of eight French-speaking countries in the region to change the name of their currency to eco as unilateral.

Finance ministers and central bank governors of Nigeria, Ghana, Sierra Leone, Liberia, Gambia and Guinea, who form the member countries, announced their position at a meeting Thursday in the Nigerian capital, Abuja.

The renaming of CFA franc isn’t “in line with the decisions of the authority of heads of state and government of Ecowas for the adoption of the ‘eco’ as the name of an independent single currency,” the members said in a joint communique. They asked for an extraordinary summit of Ecowas leaders to discuss the matter and related issues.

The West African Economic and Monetary Union, made up of eight former French colonies, said on Dec. 21 it was renaming the CFA franc while keeping its euro peg among steps to move away from the French-backed currency. Ivory Coast President Alassane Ouattara, made the announcement at the end of a two-day visit by French President Emmanual Macron in the commercial capital, Abidjan.

The CFA franc is used in two African monetary zones, one for eight West African countries and the other for six in Central Africa. In return, the states have to keep half of their reserves in France, on which the French Treasury pays a 0.75% interest rate, a requirement that will end when the nations move to the new currency.

Guinea, though a former French colony, had opted for independence from France in 1958 before the other colonies, and was excluded from the monetary zone.

©2020 Bloomberg L.P.

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