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Xof which country currency?

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Answer # 1 #

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, and a combined GDP of US$128.6 billion (as of 2018).

The initialism CFA stands for Communauté Financière Africaine ("African Financial Community"). 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 and coins 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. 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, which they have also formally adopted the name of eco for.

The CFA franc was introduced to the French colonies in West Africa in 1945, replacing the French West African franc. The West African colonies and territories using the CFA franc were Ivory Coast, Dahomey, French Sudan, Mauritania, Niger, Sénégal, Togo and Upper Volta. The currency continued in use when these colonies gained their independence, except in Mali (formerly French Sudan), which replaced at par the CFA franc with its own franc in 1961.

In 1973, Mauritania replaced the CFA franc with the ouguiya at a rate of 1 ouguiya = 5 francs. Mali readopted the CFA franc in 1984, at a rate of 1 CFA franc = 2 Malian francs. The former Portuguese colony of Guinea-Bissau adopted the CFA franc in 1997, replacing the Guinea-Bissau peso at a rate of 1 CFA franc = 65 pesos.

The currency was pegged to the French franc at F.CFA 1 = F 2. from 1948, becoming 1 F.CFA = NF 0.02 after introduction of the new franc at 1 new franc = 100 old francs. In 1994 the currency was devalued by half to F.CFA 1 = F 0.01. From 1999 it has since been pegged to the euro at €1 = F 6.55957 = F.CFA 655.957

For coins struck prior to the CFA franc, see French West African franc

In 1948, aluminium 1 and 2 franc coins were introduced. These were followed in 1956 by aluminium-bronze 5, 10, and 25 francs. All carried the name "Afrique Occidentale Française". In 1957, 10 and 25 franc coins were issued with the name of "Togo" were minted for use in that country, these were issued only for that year. From 1959, all coins have been issued by the BCEAO.

From 1959 onward, the overall size and composition of the coins changed little, however "République française" and the stylized Marianne bust was dropped from all coins, replaced with the title "Banque Centrale des États de l'Afrique de l'Ouest" with the design on the 1, 5, 10, and 25 francs featuring a gazelle's profile, carried over from colonial issues, and a tribal mask between the denomination, which has become the emblem of the West African monetary union. Nickel-Steel 100 franc coins were introduced in 1967, followed by the cupro-nickel 50 franc coins in 1972. These also featured the familiar tribal mask. Small, stainless steel 1 franc coins were introduced in 1976, replacing the larger aluminum 1 franc coins, and were struck until 1995. The 10 and 25 franc coins saw a redesign in 1980, depicting a family using a water pump and a young woman with chemistry tools, respectively. A bimetallic 250 franc coin was introduced in 1992 to reduce excess change. These coins, however, proved to be unpopular in many regions and were discontinued after 1996. They are however, still legal tender. In 2003, bimetallic 200 and 500 franc coins were introduced, replacing smaller denomination notes. Like all the other West CFA franc coins, these depicted the mask emblem.

Unlike some coins of the Central African CFA franc, no modern circulation coins have been issued depicting the names of individual member states, nor any letters or marks of indication.

All CFA coins depict both a mint mark, along with an engraver's privy mark. The mint mark is located on the reverse on the left side of the denomination or date while the engraver's mark is located on the right.

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'Emission de l'A.O.F. 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.

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. 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.

There has been some debate over whether the West African CFA franc serves as a way for France to keep influence in the region, often to the detriment to these nations. For example, one of the "rules" of the currency is that the central banks of all of the nations involved have to 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.

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Answer # 2 #

The CFA franc is the common currency for the Franc Zone, created in the 1930s on the eve of the Second World War. It is made up of three areas, each of which has its own central bank and currency:

• The West African Economic and Monetary Union (UEMOA) of 8 Member States: Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. These countries use the West African CFA franc (XOF); • The Economic and Monetary Community of Central Africa (CEMAC) of 6 Member States: Cameroon, the Central African Republic, Chad, the Congo, Equatorial Guinea and Gabon. These countries use the Central African CFA franc (XAF); • The Union of the Comoros uses the Comorian franc (KMF).

Monetary cooperation offers a stable economic framework for economic policies in the three areas.

Pegging to the euro has several advantages: it gives economies better resilience to macroeconomic shocks and helps control inflation by ensuring the stability of the currency, which is conducive to trade and investments.

The relative resilience of the Franc Zone countries compared to the rest of Africa during the 2020 public health crisis is indicative of that: 0.3% growth in 2020 as against 1.7% recession in sub-Saharan Africa (IMF, October 2021). Pegging to the euro is not an issue for the Zone’s exports, particularly for economies that export commodities that are priced on international markets.

No. Each country is free to leave the Franc Zone, either temporarily (like Mali) or permanently (like Guinea, Mauritania and Madagascar).

These States made the sovereign decision to create or join the Franc Zone (like Guinea-Bissau, the only non-Francophone member) and stay there.

The participation of member countries is based on bilateral agreements and, since 1962, cooperation agreements with regional monetary unions.

Monetary sovereignty and decisions are the responsibility of the three common and independent central banks, where governors from the Member States of the Franc Zone sit:

• Central Bank of West African States (BCEAO) in Senegal; • Bank of Central African States (BEAC) in Cameroon; • Central Bank of the Comoros (BCC).

Monetary policy decisions are taken at regional level.

France has only minority representation within the monetary policy committee and the board of governors of the BEAC (1 French governor out of 7).

Since the reform of monetary cooperation in the UEMOA announced in 2019 (see below), France no longer has a presence in the governing bodies of the BCEAO.

The Board of Governors of the BCC is made up of 8 members, half of whom are designated by the French Government.

For France, monetary cooperation offers a forum for dialogue with all the Zone’s States and promotes a stable macroeconomic framework for the implementation of economic policies. France is naturally committed to the development of its partners, including economic development.

Monetary cooperation between France and the UEMOA was implemented under an agreement from 1973.

At the request of France’s African partners, it was decided that this cooperation needed modernizing. The French President mentioned the need for this reform in his interview with the Jeune Afrique magazine in November 2020. It is coherent with his November 2017 speech at the University of Ouagadougou and was recalled at the New Africa-France Summit in October 2021.

Following discussions between the stakeholders that had been underway for several years, a new monetary cooperation agreement between France and the UEMOA was signed on 21 December 2019 during a French Presidential visit to Côte d’Ivoire. There are four aspects of the agreement:

1. A new name for the currency: the UEMOA authorities indicated their desire to switch from “CFA franc” (XOF) to “ECO”. The currency’s name is a matter for our UEMOA partners only; 2. Abolition of the obligation to centralize exchange reserves on a financial account at the French Treasury; 3. France’s withdrawal from the governance bodies; 4. Simultaneous creation of ad hoc mechanisms for dialogue and risk monitoring (including reporting).

The exchange regime remains unchanged however, with the fixed parity between the euro and the ECO and continued convertibility ensured by France.

The 2019 agreement is accompanied by a guarantee agreement, in application of the agreement signed with the BCEAO.

The change to the currency’s name, its terms and its schedule are a matter for the UEMOA in full sovereignty.

African central banks issue orders to produce banknotes and coins, under a contract with a manufacturer, in this case the Bank of France (Banque de France).

The production of CFA franc notes and coins, and those of some 20 countries, has been carried out at Chamalières by the Bank of France since its creation in 1945.

The Franc Zone Heads of State and Government may decide mutually to change the place of printing.

Many other African currencies are also produced in third countries, as not all countries have dedicated printers:

• The Guinean franc, Ethiopian birr, Ugandan shilling and Botswana pula are produced in the United Kingdom; • The Mauritanian ouguiya, Eritrean nakfa, Tanzanian shilling and Zambian kwacha are produced in Germany; • The Liberian dollar is printed in the United States.

Similarly, the euro is not printed in all 19 countries in the euro area. Notes are printed by 11 presses throughout the European Union.

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