Presentation of the franc zone
The Franc Zone includes 14 Sub-Saharan countries , the Comoros and France. Built on the close historical ties between France and African countries, the Franc Zone stems from the common desire of these countries to maintain an institutional framework that has contributed to macroeconomic stability:
- In 1959, the countries of West Africa set up the BCEAO (created in lieu of the issuing bank of the AOF and Togo); the same year, the countries of Central Africa created the BCEAEC , which later became the BEAC . The Central Bank of the Comoros has replaced the issuing bank of the Comoros in 1981. The CFA and Comorian francs were anchored to the French franc until 1 January 1999. As soon as it was adopted, the euro replaced the franc as the anchor currency of the CFA and Comorian francs, without the cooperation mechanisms of the monetary area being affected.
- Monetary cooperation between France and African countries in the Franc Zone is governed by four fundamental principles: unlimited convertibility guarantee from the French Treasury, fixed parities, free transferability and centralisation of foreign exchange reserves. In exchange for this guarantee, the three central banks are required to deposit part of their foreign exchange reserves on an “operating” account with the French Treasury.
- The terms and conditions governing this operating account have been laid down in agreements signed between the French authorities and the representatives of Franc Zone central banks. This account is similar to an overnight deposit with the French Treasury and bears interest. - Cooperation between France and Franc Zone countries takes the form, in particular, of bi-annual meetings of finance ministers of Franc Zone countries.
The franc zone is an economic, monetary and cultural area that is equivalent to none other in the world. It is made up of very diverse states and territories and results from developments and changes in the former French colonial empire. After attaining their independence, most of the newly-created African states decided to remain within a homogenous group characterised by a new institutional framework and a common exchange rate mechanism.
The franc zone is made up of France and 15 African states: Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo in West Africa, Cameroon, Central African Republic, Chad, Congo, Equatorial Guinea and Gabon in Central Africa, and the Comoros. The franc zone is a rare example of close institutionalised cooperation between countries from two continents that share a common language and history.
The Banque de France has developed close ties with the franc zone central banks, with which it works towards ensuring the smooth functioning of the area’s shared institutions. This Fact Sheet describes the franc zone’s institutional structures and the changes they are undergoing, and brings to the fore the franc zone countries’ determination to forge ahead with regional integration in order to support growth and reduce poverty.
The franc zone annual report provides detailed information on the economic and financial situation of the franc zone.
It is published by the Banque de France and available here
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