Here is what will change, and what will not change for the CFA franc used by eight West African countries, with the reform announced on Saturday by the French and Ivorian presidents in Abidjan.

The six Central African countries also using the CFA franc, but which form a separate monetary zone, are not affected by this reform.

WHAT CHANGES

THE NAME

When it was created in 1945, the CFA franc meant "franc of the French colonies in Africa". After the independence of the 1960s, the name had already evolved to become "Franc of the African Financial Community", for the eight countries of West Africa (Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali , Niger, Senegal and Togo). But this name was still perceived as a post-colonial symbol.

The FCFA will become the "Eco", which is in fact the name chosen for the future single currency of the 15 countries of the Economic Community of West African States (ECOWAS).

END OF THE DEPOSIT OF FOREIGN EXCHANGE RESERVES IN FRANCE

Second major point of the reform, the Central Bank of West African States (BCEAO) will no longer have to deposit half of its foreign exchange reserves with the Banque de France, an obligation which was perceived as a humiliating dependence on -à-vis France by the detractors of the FCFA.

The BCEAO "will in future no longer have any particular obligation concerning the investment of its foreign exchange reserves". "She will be free to place her assets in the assets of her choice", according to the French presidency.

GOVERNANCE: MORE FRENCH REPRESENTATIVES

Third change: France will withdraw from the governing bodies of the West African Monetary Union (UMOA) where it was present.

"France will no longer appoint any representative to the Board of Directors and the Monetary Policy Committee of the BCEAO, nor to the Banking Commission of the WAMU", explained the Elysée.

It is a question of "defusing criticism", according to which France continued to dictate its decisions in these bodies via its representatives, according to the Elysée.

WHAT DOES NOT CHANGE

FIXED PARITY WITH THE EURO

The fixed parity with the euro of the CFA franc, future Eco, is maintained (1 euro = 655.96 CFA francs).

It is a question of avoiding the risks of inflation (present in other African countries) explained the Ivorian President Alassane Ouattara.

This fixed parity is however one of the characteristics of the FCFA most criticized by African economists, according to whom the peg to the euro, a strong currency, poses a problem for the economies of the region, which are much less competitive, which need give priority to economic growth and employment rather than fighting inflation.

These economists plead for the end of the fixed parity with the euro and the indexation on a basket of the main world currencies, the dollar, the euro and the Chinese yuan, corresponding to the main economic partners of Africa.

FRANCE'S GUARANTEE

Paris will retain its role as financial guarantor for the eight WAEMU countries.

"If the BCEAO faces a lack of availability to cover its commitments in foreign currencies, it will be able to obtain the necessary euros from France", explains the Elysée. This guarantee will take the form of a "line of credit".

"With the maintenance of this guarantee, while waiting for the Eco, we want to avoid speculation and capital flight", justified Alassane Ouattara.

UNCERTAINTIES ON THE ECO

The FCFA reform is "a preliminary step" "in the roadmap of the ECOWAS single currency project", according to the French presidency.

But when will this single currency really be launched?

The ECOWAS countries mentioned the year 2020, but without setting a precise timetable.

At the ECOWAS summit held this Saturday in Abuja, Zainab Shamsuna Ahmed, the Minister of Finance of Nigeria - a regional economic heavyweight - estimated that the implementation of the Eco in 2020 was "not certain “, judging that there was “still work to do to meet the convergence criteria”.

The WAEMU countries, which generally respect these criteria (unlike the other ECOWAS countries), could constitute the vanguard of the Eco.

The FCFA reform should satisfy Nigeria, which demanded that a common West African currency be disconnected from the French Treasury.