West African CFA franc
The West African CFA franc (French: franc CFA or simply franc, ISO 4217 code: XOF; abbreviation: F.CFA) is the currency used by eight independent states in West Africa which make up the West African Economic and Monetary Union (UEMOA; Union Économique et Monétaire Ouest Africaine): Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. These eight countries had a combined population of 105.7 million people in 2014,[1] and a combined GDP of US$128.6 billion as of 2018.
"XOF" redirects here. For a cryptographic term, see Extendable-output function.
The initialism CFA stands for Communauté Financière Africaine ('African Financial Community').[2] The currency is issued by the Central Bank of West African States (BCEAO; Banque Centrale des États de l'Afrique de l'Ouest), located in Dakar, Senegal, for the members of the UEMOA. The franc is nominally subdivided into 100 centimes but no coins or banknotes denominated in centimes have ever been issued. The production of CFA franc notes has been carried out at Chamalières by the Bank of France since its creation in 1945.
The Central African CFA franc is of equal value to the West African CFA franc, and is in circulation in several central African states. They are both commonly referred to as the CFA franc.
In December 2019 it was announced that the West African CFA franc would be reformed, which will include renaming it the eco and reducing France's role in the currency.[3][4] The broader Economic Community of West African States (ECOWAS), of which the members of UEMOA are also members, plans to introduce its own common currency for its member states by 2027, for which the name eco has also been formally adopted.[5][6]
A –
Côte d'Ivoire
B –
Benin
C –
Burkina Faso
D –
Mali
H –
Niger
K –
Senegal
S –
Guinea-Bissau
When the CFA franc was introduced, notes issued by the Banque Centrale des États de l'Afrique Occidentale in denominations of 5, 10, 25, 50, 100, and 1,000 francs were in circulation. 500 franc notes were added in 1946, followed by those of 5,000 francs in 1948. In 1955, the Institut d'Émission de l'Afrique Occidentale Française et du Togo took over the production of paper money, issuing notes for 50, 100, 500, and 1,000 francs.
In 1959, the BCEAO took over the issuance of paper money and reintroduced a 5,000 franc note. With the exception of a few early issues, the notes of the BCEAO carry a letter to indicate the country of issuance. The country letter codes are as follows:
The country codes are used to identify and categorise flow of cash between the CFA franc countries, as well as repatriating banknotes to their country of origin.[8]
50-franc notes were last issued in 1959, with 100 francs not issued since 1965. 10,000 franc notes were introduced in 1977, followed by 2,500 franc notes in 1992.
In 2004, a new series of notes was introduced in denominations of 1,000, 2,000, 5,000, and 10,000 francs, with the 500 franc note having been replaced by a coin the year before. The newer notes contain updated security features and are more modern in design. The change was welcomed because of a perception that the old notes were dirty and disease-ridden.[9] The colour of the 5,000-franc note was changed from blue to green. On November 30, 2012, the Banque Centrale des États de l'Afrique de l'Ouest (Central Bank of the West African States) issued a 500-franc banknote.[10][11]
Controversy[edit]
There has been some debate over whether the West African CFA franc serves as a way for France to keep influence in the region, allegedly to the detriment to these nations.[12] For example, France guarantees the value of the currency as long as the central banks of all of the nations involved keep at least 50% of their foreign assets in the French treasury. Some see this as a way to keep the currency stable while other see it as limiting the economic independence of the West African nations that are involved. Even though during the early 1950s to the mid-1980s, CFA countries experienced higher real GDP growth and lower inflation rates than other non-CFA Sub-Saharan countries, the economic shocks of the 1986 and 1993 caused the CFA franc to become increasingly overvalued and run increased deficits in the French treasury. Some policymakers have argued that the CFA franc be tied to a basket of currencies rather than one currency as it currently is. Also, they state that the reserve requirement should be restructured in order to give CFA countries more economic freedom.[13]
General: