Kako Nubukpo, a Togolese economist renowned for his research on the CFA franc, believes that adoption of the Eco is a historical and decisive step for the future of the continent. His anti-CFA stance has often caused controversy and for him, the Eco represents an important step forward that will help to restore West Africa’s monetary sovereignty.
Get comprehensive access to global business, stock market and financial news, and trending topics like bitcoin and biotech. Born2Invest brings you the latest news from around the world and across the spectrum of the trusted global network.
Can the announcement of the replacement of the CFA franc by the Eco in eight West African countries really be described as historic?
Nubukpo believes that this is a historic decision for two reasons. First, it is the first time in 75 years that the name of this currency has been changed. Since December 26, 1945, and despite the various changes, the acronym CFA has been kept for “French colonies in Africa.”
As a result, in the popular imagination, the CFA has not budged. However, Nubukpo argues that money, and the name we give it, goes beyond the framework of just the economy. It forms a part of a nation’s identity. For example, you need only look at the debates that took place when the Euro was created.
“Germany did not want to give up the Deutschmark because the Deutschmark is the German identity. You cannot ask the Americans today to count in yen because their identity is the dollar. The unit of account of the currency is the primary function of the currency.” explained Nubukpo.
A symbolic moment
In this context the announcement yesterday is significant. By removing the association of being a currency tied to former French colonies the new Eco currency is, in a way, breaking down the established order. In many ways, the decision to move to the Eco is more symbolic than economic.
The name of the currency is significant. The Eco is the name chosen for the future single currency of 15 countries of the Economic Community of West African States (ECOWAS) and could be viewed as a statement of intent.
Beyond symbolic implications, there are some serious practical reforms coming through as well. France has agreed to renounce its right to at least 50% of the foreign exchange reserves of the CFA zone countries. The country has also agreed to withdraw from all WAEMU decision making bodies, perhaps marking the final, albeit symbolic, stage in the decolonization of the region.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in LePoint, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Is having a financial contingency plan a smart business move?
One of the significant decisions to be taken when starting a business with risk is taking risks itself. A decision...
Prime Mining reports high grades in Los Reyes project in Mexico
Prime Mining Corp company has recently announced that it has mobilized the first two drill rigs at its site in...
Four trends transforming the world of venture capital
What lies ahead for conventional venture capital companies in the world of cryptocurrencies is not clear right now. Yet, it...
How are ESG company news deciphered with Artificial Intelligence
Thanks to the incredible progress in artificial intelligence (AI) observed in recent years, and more specifically in natural language processing...
Five easy ways to start an online business from home
Affiliate marketing is one of the most preferred methods of monetization of a blog. Blogging is one of the most...
Business7 days ago
Why small caps and value stocks appear to be now outperforming
Biotech6 days ago
Novartis invests $1.35 billion into a drug also designed for COVID-19
Featured7 days ago
77% of the companies in the Confidi network have started fintech projects
Featured7 days ago
Market update for Late November 2020