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Cameroon hosts Central African summit over CFA franc5 minutes read

The Yaounde meeting was attended by leaders from Cameroon, Chad, C.A.R,, Equatorial Guinea, Gabon and the Republic of Congo

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Cameroon hosts Central African summit over CFA franc

Leaders from six central African countries on Friday called for “in-depth thinking” on the CFA franc, whose future has come into question in West Africa.

The extraordinary one-day meeting in Yaounde brought together leaders from Cameroon, Chad, the Central African Republic, Equatorial Guinea, Gabon and the Republic of Congo.

As members of the Economic and Monetary Community of Central Africa (CEMAC), the nations jointly use the CFA franc, a currency rooted in the French colonial era in western and central Africa.

The summit examined “monetary cooperation with France (and) decided to launch in-depth thinking on the conditions and framework of a new cooperation,” an end-of-summit communique said.

“In this context, they tasked the Bank of Central African States (BEAC) to propose in a reasonable timeframe an appropriate blueprint leading to currency’s evolution.”

The CFA — its initials come from the French words for African Financial Community — was launched on December 26, 1945 as a “franc of the French colonies of Africa.”

READ: Could this be the end of the CFA Franc?

The money then morphed into two geographic variants, one for eight countries in western Africa and another for six in central Africa, with a combined population of 155 million people.

CFA member countries must lodge 50 per cent of their reserves with the Bank of France.

The currency is essentially pegged to the euro, at a fixed rate of 655.96 CFA francs per euro.

The arrangement guarantees unlimited convertibility of CFA francs into euros, facilitates inter-zone transfers and helps price stability.

But detractors say the CFA franc is a “post-colonial” contract that prevents countries from exercising sovereignty over their currency, or which enables France to wield influence in Africa. 

  • Cameroon hosts Central African summit over CFA franc

The summit statement did not give further details about the CFA franc’s “evolution.”

Chadian President Idriss Deby Itno told Cameroonian TV that it was a question of leaving the present arrangement but retaining the principle of a joint currency.

“Tomorrow, when we leave the CFA franc, we will belong to a single (currency framework),” he said.

“Our French partners are open to every possible dialogue with us. The CEMAC and BEAC institutions have been tasked with negotiating, but without haste,” he said.

President Teodoro Obiang Nguema of Equatorial Guinea, meanwhile, said, “We shouldn’t be (linked to) former colonial powers.”

Options for change –

The 15 member states of the Economic Community of West African States (ECOWAS) have agreed to adopt a single currency, the “eco”, as early as next year.

But prospects of earlier changes to the region’s currency dramatically surfaced this month when Benin leader Patrice Talon said the western African states using the CFA franc planned to pull their reserves from the Bank of France.

“We are all agreed, unanimously, that we should put an end to this model,” Talon told French broadcasters RFI and France 24 on November 14.

France has already declared that it would not object if the CFA franc countries want “ambitious reform.”

Financial experts say changes could be risky if the peg to the euro is suddenly ditched.

READ: “ECO” adopted as name for ECOWAS single currency

Options range from a symbolic name change to pegging the CFA against a basket of currencies including the euro, the US dollar and Chinese yuan, thus, taking Africa’s main trade partners today into account.

Five of the six nations were represented in Yaounde, the Cameroonian capital, by their heads of state, while Gabon, whose President Ali Bongo Ondimba suffered a stroke last year, sent its prime minister.

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UK to Invest £1.3 Billion in Kenya

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British Prime Minister, Boris Johnson has pitched £1.3 billion worth of (about Sh170 billion) business opportunities to a Kenyan delegation led by President Uhuru Kenyatta at the inaugural UK-Africa Investment Summit held in London as part of the United Kingdom’s post-Brexit economic plan.

A statement by the British High Commission in Nairobi says the deals cut across housing, finance, renewables and entrepreneurship “will create a new lasting partnership that will deliver more investment, jobs and growth to Kenya.”

The summit comes at a time British corporate giants in Kenya such as Barclays, British luxury carmaker, Land Rover, Standard Chartered Bank , British American Tobacco  and Unilever are struggling to fend off a stiff challenge from aggressive rivals.

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Sudan plans airline revival

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Sudan announced on Tuesday, that it is in talks with Airbus over a deal to supply eight new planes to its state carrier.

According to a statement from Sudan’s finance ministry, a delegation representing the European manufacturer has met the ministers of finance and infrastructure to discuss the deal and revamp Sudan Airways’ fleet

The document further explains that Airbus has also proposed to provide technical support,  without giving details on the financial aspects of the deal.

The manufacturer has commented on the proposal.

Sudan Airways has suffered heavily over the years from trade sanctions imposed by Washington in 1997, with most of its fleet grounded.

Washington lifted the sanctions in October 2017 but the airline has still not been fully operational due to difficulties in procuring spare parts.

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Trump to expand travel ban to seven countries

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United States President, Donald Trump has confirmed plans to expand a travel ban that bars citizens of certain countries from entering the United States adding seven countries to a group of countries subject to travel restrictions, including Nigeria, Africa’s most populous country, alongside others on the continent and Asia.

The new restrictions will apply to travelers and immigrants from Belarus, Eritrea, Krygrzstan, Myanmar,Nigeria, Sudan and Tanzania.

The ban is one of the most controversial undertakings by the Trump administration, having received backlash from some leaders in the U.S. as well as foreign leaders.

The Supreme Court in a 5-4 ruling in 2018, upheld a version of the ban that blocked nationals from five Muslim-majority countries from entering the United States. The ban applies to people from Iran, Libya, Syria, Somalia and Yemen.

The ban upheld by the high court was a watered down version of the original White House proposal, which barred people from Iran, Libya, Syria, Yemen, Somalia and Sudan from coming to the United States for 90 days and banned all refugees for 120 days.

Trump'[s presence at the 2020 Davos comes just a few days before the U.S. senate begins his impeachment trial.

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