- Francophone Nations in West Africa to Move Reserves From France
Former French colonies in the West Africa region are planning to move their foreign reserves from France after years of ‘Path to Colonisation Agreement’ signed with france compelled them to maintain their foreign reserves with France, with right to access just 50 percent (previously 20 percent, later improved to 50 percent) of the previous year savings.
President Patrice Talon of Benin Republic made the statement last week during an interview with Radio France Internationale in France.
According to him, the eight-member nations of the West African Monetary Union had agreed to end the current foreign exchange model where reserves are kept with the French Treasury.
“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 CFA franc used by the eight nations is pegged to the euro and its exchange rate guaranteed by France.
Created after World War II, the franc has triggered several debates as economists blamed the region poverty on overdependence on France and limited monetary independence.
While its supporters have cited the region low inflation and currency stability when compared to other African nations as reasons for its continued use, others said these were artificials as these nations were the region poorest nations.