Background In late 1944, newly liberated France decided to devalue its currency, the
French franc, but to leave unchanged the monetary parity in its overseas colonies that had not been affected by similar economic distress. It thus established the
CFA franc (for ) for colonies in Africa, and the
CFP franc () for those in the Pacific Ocean, whereas Caribbean colonies retained use of the French franc and Indochina used a separate pegged currency, the
French Indochinese piastre. In West Africa, the CFA franc was issued by the
Banque de l'Afrique Occidentale (BAO) under an issuance privilege granted by French national legislation. In 1955, the BAO was replaced in that role by the public-sector
Institut d'Émission de l'Afrique Occidentale Française et du Togo, which in turn was renamed the BCEAO in 1959.
West African Monetary Union The West African Monetary Union was established in 1962 by treaty between France and the newly independent countries. The 1962 treaty established an operations account () at the French Treasury, in which the participating African countries committed to pool their external reserves and which also functioned as an overdraft facility. In exchange, France extended a guarantee ensuring the unlimited convertibility of the CFA franc into French franc, at a fixed exchange rate of 50 CFA francs to one French franc (unchanged since a French franc devaluation in October 1948, notwithstanding the redenomination of 100 old French francs to one new French franc in 1960). In 1973, the framework was reformed with a treaty revision and new monetary cooperation agreement that stipulated the BCEAO's relocation from Paris to Dakar. The transfer was completed in mid-1978 and the new building inaugurated in May 1979.
West African Economic and Monetary Union UEMOA was created by a Treaty signed at
Dakar, Senegal, on , by the heads of state and governments of
Benin,
Burkina Faso,
Ivory Coast,
Mali,
Niger,
Senegal, and
Togo. On ,
Guinea-Bissau, a former
Portuguese colony, became the organisation's eighth (and only non-
francophone) member state. On , a revision of the monetary cooperation agreement with France led to the termination of the operations account mechanism in January 2020, whereas France maintained its unlimited guarantee of convertibility into
euros. UEMOA has 32 international operating accounts, spread across ten countries and eight different currencies, including one at the United States Federal Reserve.
Relations with the Alliance of Sahel States Officially united in another confederation (
Alliance of Sahel States) without a monetary area, these three countries have not shown their intention to break ties with UEMOA. Leaving UEMOA is therefore a much more complex decision. The member countries of the union share a single currency, the CFA franc, which is based on a convertibility guarantee by the French Treasury. If a country leaves UEMOA, it will have to recover its foreign exchange reserves, currently divided between the UEMOA Central Bank in Abidjan (50%) and the French Treasury (50%). ==Overview==