Why West African French-Speaking Countries are Changing the CFA Currency to the ECO

French President Emmanuel Macron during a visit to Ivory Coast recently announced at a joint news conference with the Ivorian President, Alassane Ouattara that France is working towards revamping the CFA franc.

The revamped currency will be renamed the “ECO” in 2020.

During the news conference, Macron, described colonialism as a “grave mistake and a fault of the republic”.

On his official Twitter, he added that the move to drop the CFA franc is part of France’s plan to rebuild relations with its former African colonies.

I wanted to engage France in a historic and ambitious reform of cooperation between the West African economic and monetary union and our country. We do it for African youth. Let us have the courage to move forward, to build an uninhibited partnership with our partners. With the reform of the CFA Franc, we are taking a big step to write a new page in our relationship with Africa.

@EmmanuelMacron on Dec 21, 2019 twitted: "J’ai souhaité engager la France dans une réforme historique et ambitieuse de la coopération entre l’union économique et monétaire ouest africaine et notre pays. Nous le faisons pour la jeunesse africaine."

President Alassane Ouattara described the adoption of the ECO as a step in building a future free from colonial influence.

He wrote: The reform of the CFA takes into account our desire to build our future in a responsible manner, in order to attract private investment, create jobs and pursue the economic development of our countries.

Why does West Africa want a single currency?
According the BBC,  eight countries already use the CFA franc, which is pegged to the euro, and is guaranteed by France. The other seven have their own currencies, none of them freely convertible.

Proponents of the eco say the single currency will facilitate trade, lower transaction costs and facilitate payments amongst Ecowas' 385 million people.

However, critics worry that Nigeria, the region's biggest economy, will dominate monetary policy and stall the projected benefits.

If the goal is to boost trade, some analysts are sceptical that a single currency is key.

"We struggle in Nigeria alone to get produce from the north to Lagos, and to other southern parts where it can be consumed," said Sanyade Okoli, head of Alpha African Advisory in an interview with BBC.

CFA Franc, known as “Colonies Francaises d’Afrique,” was established in 1945. The currency was initially pegged to the French franc, but has been linked to the euro since 1999.