ASINT / Geopolitics & Institutions
On May 23, 2025, at a ministerial meeting in Bamako, the Alliance of Sahel States formally announced plans to create a common currency to replace the CFA franc across its three member states. Seven months later, on December 23, 2025, the three heads of state activated the Confederal Bank for Investment and Development (BCID-AES) in the same city, capitalised at 500 billion CFA francs (approximately $820 to $895 million), fully funded by the three governments. The institution is headquartered in Niamey and expected to begin operations in 2026, with a mandate to finance infrastructure, energy and agriculture. The proposed new currency has been named the “sira.” The process, by all assessments, will take several years. But the institutional architecture is now being built.
The sequence of events is important because it reveals a deliberate order. The AES did not announce a currency first. It built a confederation, a military force, a joint passport, a customs duty, a television channel, and a development bank before putting the monetary question on the table. The Liptako-Gourma charter was signed in September 2023. The ECOWAS exit was announced in January 2024, with the formal departure effective January 29, 2025. A 0.5% common customs duty on imports from non-AES countries was introduced in March 2025. A joint biometric passport was launched. A 5,000-strong unified military command was established. By the time the currency announcement came, a series of institutional facts had already been created on the ground. This matters because it means the monetary project is not a declaration of intent without structure. It sits on top of an accelerating institutional convergence that has been unusually fast by the standards of African regional integration.
The three countries remain, as of May 2026, formal members of the West African Economic and Monetary Union (UEMOA). They have not officially exited the CFA franc zone. The currency is still in use. The BCEAO, the West African Central Bank based in Dakar, still issues and manages the West African CFA franc across its eight member states. A notable data point emerged in May 2026: Burkina Faso scored 88.7% on the UEMOA reform implementation index for 2025, praised by the UEMOA Commission during its annual review in Ouagadougou. The paradox is visible. The same country building an alternative monetary system is outperforming its peers within the existing one. This is not contradiction. It is sequencing. The AES states are maintaining their UEMOA membership while constructing the instruments needed to leave. They are giving themselves time to set up the new architecture before triggering the monetary rupture.
The CFA franc system operates under a set of arrangements that date back to 1945. The currency is pegged to the euro (previously to the French franc) at a fixed rate of 655.957 CFA francs per euro. The BCEAO and the Banque de France are bound by cooperation agreements that have historically included the deposit of a portion of foreign exchange reserves at the Banque de France and a French guarantee of convertibility. A 2019 reform, presented as a break, rebranded elements of the architecture: the obligation to deposit reserves in Paris was formally removed, France withdrew from the governance bodies of the BCEAO, and the currency was to be renamed “eco” as part of a broader ECOWAS single currency project. In practice, the peg to the euro, the guarantee mechanism and the fundamental monetary policy constraints remained. The “eco” has been repeatedly delayed and is now targeted for 2027, with questions about whether UEMOA countries would participate in a first phase.
The AES critique of the CFA system is not new. It draws on decades of analysis from African economists and political movements. The core argument is that the fixed peg makes Sahelian exports artificially expensive, renders European imports competitive, prevents monetary policy from responding to domestic economic conditions, and drains liquidity from the zone through the reserve deposit mechanism. Supporters of the system argue that the peg has kept inflation low and provided a credible nominal anchor in economies with limited institutional capacity for independent monetary policy. Both arguments have empirical support. The question is not which is correct in the abstract. It is what the actual consequences of departure would be for economies that are simultaneously fighting insurgencies, managing fiscal stress and depending on regional financial markets for budget financing.
This is where the BCID-AES enters the picture. The bank is designed to provide an alternative financing channel that does not depend on the BCEAO or the UEMOA regional financial market. During the ECOWAS sanctions on Niger, the country was cut off from the UEMOA bond market, preventing it from financing its budget. External debt reached 14.5 billion CFA francs. The experience demonstrated to the AES governments what a monetary exit could look like under hostile conditions: loss of access to the regional interbank market, inability to issue sovereign bonds in CFA, and isolation from the clearing mechanisms that underpin cross-border trade within the franc zone. The BCID-AES is, in part, an insurance policy against a repeat of that scenario.
The bank’s initial capital of 500 billion CFA francs is significant relative to the fiscal capacity of its three shareholders. Mali, Burkina Faso and Niger collectively represent approximately 8% of the ECOWAS GDP, estimated at $761 billion. The combined nominal GDP of the three states was roughly $62 billion in 2024. Mobilising $820 to $895 million from national tax revenues is a material commitment. Whether the three governments can sustain the capital injection schedule, attract external co-investors (China, BRICS institutions, African sovereign wealth funds have been mentioned as potential partners), and build credible governance within the institution will determine whether the BCID-AES becomes a functional development bank or a political symbol.
The proposed sira currency raises a separate set of questions. A multilateral currency requires convergence of fiscal policies, harmonisation of budgets, credible reserve management and a central bank with operational independence. The AES states currently have no shared central bank, no common monetary policy framework, no independent reserve management capacity and no currency printing infrastructure. These are not reasons the project cannot succeed. They are preconditions that must be met for it to function. The AES leadership has indicated that the new currency would not be pegged to the euro, offering greater flexibility for financing deficits and investing in critical infrastructure. This flexibility is the core of the sovereignty argument. It is also the core of the risk: a currency without a credible external anchor, issued by governments under fiscal pressure and security expenditure, operating in landlocked economies with limited export diversification, would face immediate questions about convertibility, inflation management and exchange rate stability.
The implications for the remaining UEMOA members are substantial. If Mali, Burkina Faso and Niger exit the franc zone, the monetary union contracts from eight to five members (Benin, Cote d’Ivoire, Guinea-Bissau, Senegal, Togo). The BCEAO loses three of its eight constituents and a portion of the monetary base. Cross-border trade flows within the zone are disrupted. The remaining members must recalibrate their own fiscal and monetary coordination. Senegal’s Prime Minister Sonko has himself been vocal in calling for an end to the CFA franc, adding a further axis of pressure on the system from within.
For investors and operators, the practical question is timing. The sira does not exist yet. The CFA franc is still in circulation. The UEMOA membership is intact. Mining contracts, import-export settlements, bank deposits, sovereign bonds and salary payments across the three countries are all denominated in CFA francs. A currency transition, if and when it occurs, will require conversion mechanisms, transitional dual-circulation periods, revised payment systems and renegotiation of contracts with currency-specific clauses. The process is estimated to take several years. But the direction of travel is declared, the institutions are being built, and the political commitment across all three governments appears aligned.
The structural question is whether the AES can build a monetary system that is credible enough to retain confidence, flexible enough to serve its development objectives, and resilient enough to operate in a region where security spending consumes a significant share of public budgets. Every previous attempt to exit the CFA zone has either been reversed (Mali left in 1962 and returned in 1984) or not attempted at the scale now proposed. The AES is not one country seeking monetary independence. It is three countries attempting to create a new currency union while simultaneously exiting an existing one. The ambition is clear. The institutional momentum is real. The technical and economic challenges are equally real. What happens next depends on whether the BCID-AES can demonstrate operational capacity, whether the sira design process produces a credible monetary framework, and whether the remaining UEMOA members accommodate or resist the transition.