This archive report was first published on 17 November 2019.
On November 14, Benin's President Patrice Talon sparked a debate about the future of the West African CFA franc, a currency tied to the euro and historically rooted in French colonial rule.
The CFA franc is used by eight countries in West Africa, including Benin, and is pegged to the euro, providing an important measure of financial stability. However, this link to France and the euro is politically sensitive in countries that have been independent from France for nearly six decades.
Earlier this year, the Economic Community of West African States (Ecowas) agreed to adopt a single currency, the "eco", as early as next year. This would supplant the CFA franc for the eight member states of the West African Monetary Union (Wamu).
However, prospects of earlier changes to the region's currency dramatically surfaced this month when President Talon said the Wamu states planned to pull their reserves from the Bank of France. "We are all agreed, unanimously, that we should put an end to this model," Talon told French broadcasters RFI and France 24.
But critics of the CFA franc in its current form complain that the peg with the euro puts the economies of the CFA franc zone in a straitjacket. They argue that the economies are tied to the eurozone's monetary policy, which is unsuited to their needs.
"It requires our central banks to follow very restrictive monetary policies," said Demba Moussa Dembele, a Senegalese economist and director of the Forum for African Alternatives think tank. "The priority of African economies is not the fight against inflation—they need investment and jobs."
