WAEMU (West African Economic and Monetary Union)
A union of eight West African states, founded in Dakar in 1994, that share the CFA franc issued by the BCEAO, a customs union and common rules.
WAEMU (West African Economic and Monetary Union) is a union of eight West African states that share a currency, the CFA franc (franc of the African Financial Community), a customs union and common rules. On January 10, 1994, in Dakar, seven heads of state signed the treaty establishing the West African Economic and Monetary Union, and it was in the same city, in the days that followed, that the CFA franc lost half its value against the French franc. Guinea-Bissau joined the Union in 1997, bringing the count to eight: Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal, Togo. WAEMU layers a customs union, with a common external tariff in force since 2000, on top of an older monetary union. The currency, the West African CFA franc, is issued by the BCEAO (Central Bank of West African States) in Dakar and pegged to the euro at a fixed parity; the Commission sits in Ouagadougou. The reform announced in Abidjan on December 21, 2019 ended the obligation to deposit half of the reserves in the French Treasury operations account and removed French representatives from the governing bodies, while keeping the peg and the convertibility guarantee. For an underwriter, the zone changes the nature of transfer risk. Between members, the currency moves without controls; into euros, convertibility rests on the French guarantee, and outright inconvertibility has always been rare. The risk sits elsewhere, in the Union's own institutions. In January 2022, following ECOWAS (Economic Community of West African States), WAEMU cut Mali off from the BCEAO and the regional financial market, and Bamako could no longer meet its payments on that market until the measures were lifted in July. Burkina Faso, Mali and Niger left ECOWAS in January 2025 without leaving WAEMU, whose Council of Ministers has been chaired by Burkina Faso's finance minister since October 2025, and the question of whether they stay in the monetary zone now runs through every Sahelian sovereign credit analysis. A risk in the zone is therefore underwritten country by country, despite the common currency.
Textbook case: in January 2022, a supplier covered by credit insurance was delivering to a Malian ministry paid by transfer through the BCEAO (Central Bank of West African States). The freeze decided by the regional bodies blocked the payment without any Malian law prohibiting it, and the underwriter had to classify the loss as either transfer failure or an act of state.
waemu, uemoa, west african economic and monetary union, waemu zone, west african cfa zone
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