West Africa’s New Currency to be Delayed

A plan to launch a new currency to replace the CFA franc used by several countries in West Africa may not happen for at least five years. Ivory Coast President Alassane Ouattara has said the coronavirus pandemic has derailed the project to introduce the eco currency this year. Last December, the eight countries which use the CFA franc – all former French colonies plus Guinea-Bissau – said they would reduce their economic ties to France, while there has been a parallel move to create a single currency for the whole of West Africa. But the ambitious plan has been torpedoed by the economic fallout of the global Covid-19 pandemic. The International Money Fund has forecast sub-Saharan Africa’s economy will contract more than 3% this year. Nations in the bloc have agreed to work towards reducing their budget deficits to below 3% of GDP, a measure of the value of their economies. But according to the Ivorian president, that is unlikely to happen for three to five years. Other countries which do not use the CFA franc, like Nigeria and Ghana, are also interested in adopting the new regional currency. But Ghana does not want the eco pegged to the euro, like the CFA franc, and Nigeria wants the former French colonies to break all financial ties with Paris.

SOURCE: FURTHER AFRICA