In 2020, the region is set to get a long-discussed new currency: the Eco. Many Africans are pleased — but there is a lot of work ahead, say experts who insist a rebrand of the old Franc CFA will not do the job.
Many Africans cheered and applauded when Ivory Coast’s President Alassane Ouattara announced on Saturday “that, in agreement with the other West African Economic and Monetary Union Heads of State, we have decided to reform the CFA franc with the following three major changes: First, the name change of the currency from the CFA franc to the Eco.”
His speech marked the official end of the French-backed currency CFA francs for the eight countries belonging to the Economic Community of West African States (ECOWAS). Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo currently use the CFA franc which has been criticized by many as a French relic from colonial times. Further, France will stop holding “50 percent of the reserves in the French Treasury” and will withdraw “French governance” related to the currency. The Eco’s value will be pegged to the euro, just like the CFA has been for more than two decades.
A modest victory
However, not everyone is as optimistic. According to Mor Gassama, economist and researcher at the Cheikh Anta Diop University in Dakar, the introduction of the Eco is a victory to be celebrated with great modesty. He says that there are still many grey areas in relation to the introduction of the Eco.
“These are just words at the moment because the problem in Africa, as everyone knows, is not just a problem of money”, he told DW. “It is first and foremost a problem of the management of public funds. If a head of state does not respect his commitments, if the best resources we have are squandered or not used according to our priorities, whatever the name of the currency, it will not do much good. The decision is more political than economic.”
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