CFA members

Benin Burkina Faso Cameroon Central African Republic Chad the Comoros Congo Republic Equatorial Guinea Gabon Guinea Bissau Ivory Coast Mali Niger Senegal Togo

France's Cooperation Minister Charles Josselin has confirmed the peg in order to try and alleviate rumours of a devaluation.

Mr Josselin was speaking at a conference in Yaounde, Cameroon following a meeting of economy and finance ministers from the CFA zone.

At the meeting the 15 member countries - all West African states except the Comoros - forecast a combined economic growth rate of 5.4% in 2002.

That is higher than the 4% achieved last year.

While the headline figure seems strong, fast population growth in the region means that real growth is stunted.

Commodity ups and downs

An oil boom in Equatorial Guinea is one bright spot in the region, and it is expected to raise oil production 50% in 2002.

Another strength is in cocoa prices. Ivory Coast is the world's leading exporter of cocoa beans.

But high fuel prices are expected to feed inflation for importing countries.

And low cotton prices in the international markets is likely to see many cotton producers make a loss on exports, despite bumper harvests.

Challenging maths

The changeover to the euro has landed the CFA zone with the complicated exchange rate of about 656 CFA per euro rather than the previous 100 CFA to a franc.

But African ministers are hoping that the euro peg will hope boost the eurozone's trade with the region.

"On the economic front, the permanent establishment of the single currency strengthens the monetary stability in the CFA zone, allowing increased trade exchanges and offering new opportunities for external investment."

The CFA was created in 1948 and devalued by 50% in 1994 in order to ease a financial crisis in the region.