Africa-Press – Lesotho. Before the Eco can replace the CFA franc, as announced in Abidjan on 21 December 2019, a number of technical, legal and political hurdles must be cleared.
The date of the new currency’s introduction is impossible to predict at this time. To date, only the monetary agreement has been finalised. It will replace the 1973 agreement between the eight Union Economique et Monétaire Ouest Africaine (UEMOA) member states and France.
The new agreement was signed on 22 December 2019 by all ministers of finance of the nine governments concerned, but no information is known about its content because the African ministers did not release it to the public.
Prior to the upcoming Economic Community of West African States (ECOWAS) meeting, set to be held in June 2020, there are several steps left in the transition process:
The transition from the CFA franc to the Eco is shaping up to be tricky.
If markets get anxious about the new currency’s risk of instability, the Eco’s exchange rate could become highly volatile. Monetary turmoil resulting from such market fears would inevitably impact economic growth across West Africa.
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