As competition grows to gain influence across Africa, the most significant change to the traditional relationship between France and its former West African colonies will take place in June this year. The common currency,the Communauté Financière Africaine (CFA) franc, which has been in place since 1948 and has been in use in 14 African countries, is set to cease in its current form and transform into the eco.

Few in West Africa will lament the passing of the CFA franc. Since 1948, it has been one of the three pillars of France’s relationship with its West and Central colonies and the main mechanism through which France exerted an inordinate influence in its former West African colonies. The other two pillars were military accords that provided for French military bases across the region and a common françafrique foreign policy in international forums. While the common currency provided stability and convertibility, it also provided France with a mechanism to maintain what it called its chasse guardée, or private hunting ground for French businesses.

Citizens within the franc zone countries largely discounted the benefits of the CFA and deeply resented the long arm of France’s influence. People in West and Central Africa remain suspicious and hostile to la françafrique relationship because, for decades, it was handled in semi-secrecy at Presidential level between French and African Presidents and so became bound up with local resistance to long dictatorial tenures of West and Central African Presidencies and hostility to the political elite’s resistance to democratic rule.

Typical of françafrique, the most significant change to its existence in 72 years was announced on December 21 by Ivoirian President Alasane Ouattara – in françafrique terms the region’s ‘senior President’ – and France’s President Emmanuel Macron. For now, the changes only apply to the eight member countries of the West African franc zone, the Union économique et monétaire d’Afrique de l’Ouest, or UEMOA, namely Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. The six members of the Central African franc zone, Communauté Economique et Monétaire de l’Afrique Centrale (CEMAC) – Cameroon, the Central African Republic, Chad, the Republic of Congo (Congo-Brazzaville), Equatorial Guinea and Gabon – will continue to use the CFA franc as it is.

“The umbilical cord is cut” was how one economist, Kako Nubukpo, described the change to a French newspaper, but its phasing out will be slow. The reforms are intended to give economic and financial stakeholders greater independence notably, around developing monetary policy. A fixed exchange rate tied to the euro will remain. Benin’s Finance Minister, Romuald Wadagni, said the process was expected to take years.

The reforms include:

replacing the CFA franc with the eco currency;

UEMOA member States will no longer keep 50% of their reserves at the French Treasury;

France will no longer have representatives on the currency management bodies of the UEMOA countries; and

the eco will maintain a fixed exchange rate with the euro, which will be backed by France.

In the final phase of the transition, the eco will be adopted as the common currency of the Economic Community of West African States (Ecowas). First mooted in 1983, the idea was adopted unanimously at the Ecowas summit in Nigeria in June last year, with a launch set for the middle of this year.

Although the eco will create the biggest single currency zone in Africa, there are concerns about how it will impact on regional economies – countries like Côte d’Ivoire and Senegal have attracted significant foreign investment because of the long-term stability that the CFA franc has brought. The new currency zone will have to impose common currency discipline on vastly fluctuating currencies like Ghana’s cedi and Nigeria’s naira. There are also concerns about the 2020 launch date, as only five of the member States meet the criteria to adopt the currency, namely Cape Verde, Côte d’Ivoire, Guinea, Senegal and Togo. These criteria include:

a Budget deficit of less than 4%;

• gross reserves equal to three months of imports;

• annual inflation of less than 10%;

• public debt that does not exceed 70% of gross domestic product;

a nominal exchange rate variation of about 10%; and

• central bank financing for the Budget of less than 10% of the previous financial year’s tax receipts.

That said, the changes have seemed inevitable for some time. They have been further propelled by a time of great flux in international relations as the world’s major economies seek to increase their influence on a continent that is home to the world’s fastest-growing economies.

Last year saw China’s biennial Belt and Road Initiative conference, Russia’s inaugural Russia-Africa summit and Japan’s biennial Africa summit. This year, as the UK squares up to its Brexit decision – made in a flurry of nostalgia for its imperial past – it hosted its first UK-Africa summit to much fanfare in January. As if to contrast this, Macron placed the CFA franc squarely as a legacy of French colonialism in Africa, which he has also decried as wrong. With the subtle play of the master strategist, the transition to the eco will de facto extend the euro’s parity from the UEMOA member States to the Ecowas States – including several former British colonies, notably the regional economic powerhouse, Nigeria.