West Africa’s monetary union has agreed with France to rename its CFA franc the Eco and cut some of the financial links with former metropole, ensuring the region’s common currency since its creation soon World War Two.

Under the new agreement, the Eco will remain pegged to the euro but eight African countries in the bloc won’t have to transfer 50% of their reserves in the French Treasury and there will no longer be a French representative on the currency union’s board, meaning Paris will also withdraw “from the governance bodies in which it was present”.

Critics of the CFA have long seen it as a relic from colonial past while proponents of the currency say it has provided financial stability for the turbulent region.

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“This is a historic day for West Africa,” Ivory Coast’s President Alassane Ouattara said during a news conference with French President Emmanuel Macron in Abidjan, the capital.

In 2017, Macron highlighted the stabilizing benefits of the CFA but said it was up to African governments to determine the future of the currency.

“Yes, it’s the end of certain relics of the past. Yes it’s progress … I do not want influence through guardianship, I do not want influence through intrusion. That’s not the century that’s being built today,” said Macron.

We have decided to reform the CFA franc with three major changes (…) including the change of name “and” stopping the centralization of 50% of the reserves in the French Treasury, “said Mr. Ouattara during at a joint press conference on the second day of the French president’s visit to Côte d’Ivoire.

Emmanuel Macron described this decision as “major historic reform”. “The Eco will see the light of day in 2020, I welcome it,” he added, adding that the CFA franc was “perceived as one of the vestiges of Françafrique”.

This reform has been negotiated for six months, according to a French source, between France and the eight countries of the West African Economic and Monetary Union (UEMOA): Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.

It does not currently concern the six Central African countries which use the CFA franc but which form a separate monetary zone.

Paris said it was “open” to this development after multiple discussions with African capitals, while the controversy over this currency had again grown in recent months.

The “franc of the French colonies in Africa” was created in 1945 and became the “franc of the African Financial Community” after independence.

The fixed parity with the euro of the CFA franc, the future Eco, maintained (1 euro = 655.96 CFA francs), but this point is likely to change when the common West African currency comes into being.

Ms. Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), issued the following statement today on the reform of the West African Economic and Monetary Union (WAEMU)’s CFA franc framework:

“I welcome the reforms to the WAEMU’s CFA franc currency arrangement that were announced today by Presidents Ouattara and Macron in Abidjan. They constitute a key step in the modernization of long-standing arrangements between the West African Economic and Monetary Union and France.

“The announced measures build on WAEMU’s proven track record in the conduct of monetary policy and external reserve management. In recent years, the WAEMU has recorded low inflation and high economic growth, the fiscal situation has improved, and the level of foreign exchange reserves has increased.

“The reforms also maintain key elements of stability that have served the region well, including the fixed exchange rate with the euro and the guarantee of unlimited convertibility provided by France.

“The IMF stands ready to engage with the regional authorities, as needed, and to support the implementation of this important initiative.”