Cote d’Ivoire, or Ivory Coast, is a nation in West Africa. Its southern border lies on the Gulf of Guinea. From medieval times, the Ivory Coast region was a busy trade route in the trans-Sahara trade. Merchants from North Africa bought gold, salt, and slaves from the region. Traders exchanged goods for other goods because there was no formal currency at the time. During the colonial period, Cote d’Ivoire adopted its first official currency, one that was linked to the French franc. Currently, the country’s official currency is the West African Franc.
French Influence in Cote d’Ivoire’s Currency
From as early as 1482, Europeans made trips to the West African coast in search of commodities. Interactions with the Dutch, French, and British traders went on until 1842, when French authorities seized the Ivory Coast and made it a French colony. The settlers planted cocoa, coffee, palm oil crops, and bananas, aiming to export the commodities to France and other European countries. Shortly afterward, the colonizers started exporting their agricultural produce to France, Britain, Portugal, Spain, and Germany. In 1904, Cote d’Ivoire was added into the group of West Africa French colonies known as ‘the Federation of French West Africa.' Just like the other French colonies, Cote d’Ivoire was made to adopt the French West African CFA franc as its first official currency.
French West African Franc
The French West African CFA franc was linked to the French franc and was produced and circulated by the Bank of West Africa situated in Dakar, Senegal. The currency was introduced in 1903, and it existed only in the form of banknotes. The notes were in denominations of 5, 25, 50, 100, 500, and 1,000 francs. Aluminum-bronze coins of 1 franc and 50 centimes were first issued in 1944. The West African CFA franc was introduced to the French Colonies in West Africa, including the Ivory Coast.
West African CFA Franc
The West African CFA franc and the Central African CFA franc were issued concurrently. Both currencies have the same value and are guaranteed by the treasury of France. The West African CFA franc was issued in the form of banknotes of varying denominations. The Central Bank of West African States took up the role of producing and circulating currency from the Bank of West Africa. To this day, Ivory Coast still uses the West African CFA franc as its legal tender. Other West African nations that use the currency are Benin, Togo, Senegal, Mali, Burkina Faso, Niger, and Guinea-Bissau.
Benefits of the West African CFA Franc
The shared currency has improved trade in the West African region, particularly in Cote d’Ivoire, because traders do not worry about exchange rate fluctuations. The West African CFA franc is a stable currency, which has enabled economies to experience steady growth. Lastly, business people in the region conduct their businesses with ease because they have a common currency.
Limitations of the West African CFA Franc
The West African CFA franc has some shortcomings. Given its ties to the French treasury, some people feel that the currency is controlled by the French authorities. Furthermore, the fact that the currency has a fixed exchange rate to the euro means the West African CFA franc does not reflect changes in economic situations, which makes it a risky currency to use.