In the wake of its withdrawal from the Economic Community of West African States (ECOWAS), Mali has clarified that it has no intentions of exiting the West African Economic and Monetary Union (UEMOA or WAEMU), which shares a common currency, the CFA franc, pegged to the euro. Meanwhile, Burkina Faso has hinted at the possibility of leaving the monetary union, raising questions about the future of regional integration in West Africa.
The decision by Mali, Burkina Faso, and Niger to withdraw from ECOWAS, following criticism for recent coups, has cast uncertainty over their continued participation in UEMOA. UEMOA consists of eight nations that utilize the CFA franc as their shared currency. Foreign Minister Abdoulaye Diop of Mali clarified the country’s stance, stating, “Mali is withdrawing from ECOWAS but remains a member of UEMOA.” In contrast, Burkina Faso’s military leader, Ibrahim Traore, suggested that a departure from the monetary union might be on the horizon.
In response to a query regarding the potential impact on the CFA currency, Traore responded, “Probably,” during an interview with journalist Alain Foka, which was posted on Foka’s YouTube channel. The military-led governments in Mali, Burkina Faso, and Niger, which have been in power since 2020 following coups, have faced pressure from ECOWAS and the international community to restore democratic governance. However, they have resisted these demands and have instead created a new pact known as the Alliance of Sahel States, with the aim of strengthening political, economic, and monetary unity among the three nations.
The CFA franc has been a subject of controversy, with critics viewing it as a vestige of French colonialism. On the other hand, supporters argue that it has provided a degree of financial stability in a region prone to turbulence. Moody’s, the credit ratings agency, has cautioned that this move could jeopardize economic growth. While not their baseline expectation, Moody’s suggests that an exit from WAEMU (the monetary union) would pose greater challenges to the departing countries due to the credit support provided by WAEMU membership, including macroeconomic stability and reduced external vulnerability.
The decision by Mali, Burkina Faso, and Niger to withdraw from ECOWAS, an organization that oversees regional trade and services flows valued at nearly $150 billion annually, has implications for regional cooperation and economic integration in West Africa. The future of the CFA franc and the monetary union remains uncertain as these countries navigate a complex landscape of political change and economic challenges.
