West African CFA franc in the context of "Free-trade area"

A free trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, import quotas and tariffs, and to increase trade of goods and services with each other. If natural persons are also free to move between the countries, in addition to a free trade agreement, it would also be considered an open border. It can be considered the second stage of economic integration.

Customs unions are a special type of free trade area. All such areas have internal arrangements which parties conclude in order to liberalize and facilitate trade among themselves. The crucial difference between customs unions and free trade areas is their approach to third parties. While a customs union requires all parties to establish and maintain identical external tariffs with regard to trade with non-parties, parties to a free trade area are not subject to this requirement. Instead, they may establish and maintain whatever tariff regime applying to imports from non-parties as deemed necessary. In a free trade area without harmonized external tariffs, to eliminate the risk of trade deflection, parties will adopt a system of preferential rules of origin.

A currency union (also known as monetary union) is an intergovernmental agreement that involves two or more states sharing the same currency. These states may not necessarily have any further integration (such as an economic and monetary union, which would have, in addition, a customs union and a single market).

The Economic and Monetary Community of Central Africa, generally referred to by its French acronym CEMAC (for Communauté Économique et Monétaire de l'Afrique Centrale; Spanish: Comunidad Económica y Monetaria de África Central), is an organization of states of Central Africa established by Cameroon, Central African Republic, Chad, the Republic of the Congo, Equatorial Guinea and Gabon to promote economic integration among countries that share a common currency, the Central African CFA franc.

There is a strong overlap between CEMAC and Economic Community of Central African States (ECMAS) in the areas of membership and mandates.

The Central African CFA franc (French: franc CFA or simply franc; ISO code: XAF; abbreviation: F.CFA) is the currency of six independent states in Central Africa: Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea and Gabon. These six countries had a combined population of 55.2 million in 2020, and a combined GDP of over US$100 billion (as of 2021).

CFA originally stood for Colonies françaises d'Afrique ("French colonies of Africa"); following the independence of these states, its name was changed to Communauté financière africaine ("African Financial Community"). The currency is issued by the Bank of Central African States (BEAC; Banque des États de l'Afrique Centrale), located in Yaoundé, Cameroon, for the members of the Economic and Monetary Community of Central Africa (CEMAC; Communauté Économique et Monétaire de l'Afrique Centrale). The franc is nominally subdivided into 100 centimes but no centime denominations have been issued. The production of CFA franc notes has been carried out at Chamalières by the Bank of France since its creation in 1945.

The West African Economic and Monetary Union, generally referred in English to by its French acronym UEMOA (for Union Économique et Monétaire Ouest-Africaine) and alternatively as WAEMU, is a treaty-based arrangement binding together eight West African states, seven of which were previously colonies of French West Africa. It was established to promote monetary and financial stability as well as economic integration among countries that share the West African CFA franc (ISO 4217: XOF) as a common currency. From 1962 to 1994, it was known as the West African Monetary Union (WAMU or, in French, UMOA for Union Monétaire Ouest-Africaine).

Territorially, UEMOA mostly overlaps with the larger regional organization, the Economic Community of West African States (ECOWAS).

Regional Integration is a process in which neighboring countries enter into an agreement in order to upgrade cooperation through common institutions and rules. The objectives of the agreement could range from economic to political to environmental, although it has typically taken the form of a political economy initiative where commercial interests are the focus for achieving broader socio-political and security objectives, as defined by national governments. Regional integration has been organized either via supranational institutional structures or through intergovernmental decision-making, or a combination of both.

Past efforts at regional integration have often focused on removing barriers to free trade in the region, increasing the free movement of people, labour, goods, and capital across national borders, reducing the possibility of regional armed conflict (for example, through Confidence and Security-Building Measures), and adopting cohesive regional stances on policy issues, such as the environment, climate change and migration.

The Central Bank of West African States (French: Banque Centrale des États de l'Afrique de l'Ouest, BCEAO) is a central bank serving the eight west African countries which share the common West African CFA franc currency and comprise the West African Economic and Monetary Union.

The BCEAO is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.