IN a twist of developments, Mali has declared that it has no intentions to exit West Africa’s currency zone, West African Economic and Monetary Union (UEMOA or WAEMU), contrary to Burkina Faso’s indication of a potential departure. The announcement follows the decision by Mali, Burkina Faso, and Niger to withdraw from the Economic Community of West African States (ECOWAS), a move prompted by criticism over recent coups.
Mali’s Foreign Minister Abdoulaye Diop clarified to Reuters that while Mali is withdrawing from ECOWAS, it remains committed to UEMOA. Meanwhile, Burkina Faso’s military leader Ibrahim Traore suggested in a video interview that a departure from the monetary union could be on the horizon.
The military-led nations, grappling with insurgencies from militant groups associated with al Qaeda and Islamic State, have formed the Alliance of Sahel States, expressing their intent to strengthen political, economic, and monetary union.
Critics view the CFA franc, the common currency used in WAEMU, as a relic of French colonialism, while proponents argue that it has provided financial stability in a volatile region. Moody’s ratings agency highlights the economic risks associated with the potential departure from WAEMU, emphasising the credit support it provides for macroeconomic stability and reduced external vulnerability.
The uncertainty surrounding Mali, Burkina Faso, and Niger’s status in both ECOWAS and WAEMU raises questions about the future of regional integration, as the ECOWAS region’s annual trade and services flows amount to nearly $150bn.