Francophone nations in West Africa want more control over the management of their currency and plan to move some reserves from France, said Beninese President Patrice Talon.
The eight-member nations of the West African Monetary Union “unanimously agree” on ending a decade-old model whereby their foreign-exchange accumulation is kept at the French Treasury, Talon said in an interview with Radio France Internationale. Their currency, the CFA franc, is pegged to the euro, and its convertibility is guaranteed by the former colonial ruler.
Established after World War II, the franc’s use frequently triggers debate about the region’s continued economic dependence on France and the view that the currency is artificially strong and curbs the region’s competitiveness.
Its supporters cite the region’s low inflation and the currency’s stability relative to other African nations as reasons for its continued use.
“I can’t give you the date, but the willingness of everyone is already there,” Talon said in response to a reference to French Finance Minister Bruno Le Maire’s openness to a reform of the currency. “Psychologically, with regards to the vision of sovereignty and managing your own money, it’s not good that this model continues. ”
The regional central bank will manage the reserves and distribute them to partners around the world, including Japan, Europe, China, and North America, said Talon.
Ivory Coast, with an economy of about $40bn, is the biggest among the users of the CFA franc in West Africa. Six other nations in central Africa use the same model.