(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)
"We have to be able to control our monetary policy ourselves and not accept that three French people have a right of veto in our central banks," threw Chad's President Idriss Déby on Radio France International 25. June this year. The newspapers Le Monde and Le Figaro have been using weekly slot for almost a year for various views, and the news magazine Jeune Afrique has published separate papers on the future of the CFA franc. In August this year, a man in Dakar was jailed for burning an 5000-CFA banknote during a demonstration against the coin unit.
The CFA franc is used today in 15 African countries with a total of 150 million inhabitants and some are referred to as an African Euro. But there are two major differences between the CFA and the European currency unit: CFA has a colonial origin and a fixed parity against the euro. The popular revolt against the CFA franc lies in its colonial history, while the elite discusses pure monetary policy. The book of French Charles-Enguerrand Coste, Le franc CFA. An atout decrié mais pourtant bien reel – "CFA franc. Unfortunately, a wasted but still existing resource 'only discusses the latest.
The CFA franc is used in 15 African countries with a total of 150 million inhabitants and is referred to as an African Euro.
Colonial power money. The Franc des Colonies française d'Afrique (Franc CFA) was established by France in 1945, long before an early colonial release was considered possible. The CFA franc had fixed parity to the French franc; for 100 CFA you got 200 (old) French francs. During the 1960s, all the French colonies in Africa that used CFA francs became independent. They made their own flags, constitutions and national songs, but retained the colonial coinage. Admittedly, that name changed to "Communauté Financière Africaine", but the abbreviation remained the same – CFA. But the colonial bond disappeared from the name. The vast majority of French-speaking West and Central Africa countries still use CFA francs today. Madagascar and Mauritania left the coin unit in 1973, but in return the former Spanish colony Equatorial Guinea CFA went into service in 1984, and the former Portuguese colony Guinea-Bissau the same in 1997.
In the 1980s, prices for the vast majority of raw materials exported by the CFA countries – cotton, peanuts, palm oil, oil, gold – fell, and it became clearer and clearer that the value of the CFA franc was overstated. On January 12, 1994, France and the CFA countries devalued 50 percent of the CFA franc, so that the fixed parity was 100 CFA against one (new) French franc. The purpose of the devaluation was, in the long run, to stimulate increased national production and to improve competitiveness. However, the immediate result was that all goods imported from Europe became twice as expensive. Those who had saved-
money in an African bank, got their fortune cut in half overnight, while the elite, who had largely invested their money in French banks, got twice as many CFAs for them. When the euro replaced French francs as a unit of currency in France on January 1, 1999,
rich still for the value of CFA: 656 CFA francs could be exchanged for one euro.
The Facebook group "No to CFA franc – total independence" has over 18 members at the time of writing.
Neo-colonialism. The popular movement against the CFA franc in Africa is directed exclusively at the former colonial power of France. It is France that has established the monetary unit, and it is France that guarantees its international value and convertibility. But this does not come for free. Half of the CFA countries' foreign exchange reserves must be placed in the French central bank in Paris, and the notes themselves are printed in Clermont-Ferrand. This is taken as a symbol of neo-colonialism and a continuation of FranceAfrique, the well-known expression of personal collaboration between political and economic elites in France and French-speaking Africa. The popular movement towards the continued use of CFA francs in Africa uses words like "servility" and "feudalism" about relations with France. In January, the movement mobilized for large demonstrations against the CFA in Paris and London, Dakar and Abidjan. The closed Facebook group "No to CFA franc – total independence" has over 18 members at the time of writing. "We continue to submit to France using the CFA," says Togolese community debater Kako Nubukpo. "Why should we use a unit of money established by our former colonial power when they are no longer using the francs themselves?" Cites Cameroonian sociologist Marital Ze Belinga.
I understand the feelings of people who protest against neo-colonial ties and continued addiction to France. But I still agree with Senegalese economist Felwine Sarr when writing in Le Monde (Aug. 28) that questions related to the future of the CFA franc are far too complex for currency demonstrations to be the right way to go. "We must avoid the fact that most people think that just by getting rid of the CFA franc, all financial problems in Africa will disappear," he says. And he is quite right in that. Coste's book also clearly shows that the monetary issues related to the CFA franc are very complex.
Stability or servility? The political elite in Africa do not agree on whether using the CFA franc is an advantage or disadvantage. Former Togo Kako Nubukpu Minister of Planning also argues that CFA francs are destroying the competitiveness of the countries using it, because imports are disproportionately cheap as the convertibility is fixed and high, much higher than the economies of the countries using the CFA would indicate. He is right in that. However, Ivory Coast President Alassane Ouattara is more concerned about the CFA providing financial stability and predictability for investment and international trade. He is also right in that. Benin's President Patrice Talon is convinced that ordinary people would be poorer without a strong CFA. Chad's President Idriss Déby, on the other hand, meets the people and focuses on the neo-colonial ties the CFA franc maintains.
Charles-Enguerrand Coste's book addresses only some of the financial and monetary issues surrounding the use of CFA. The neo-colonial bond and the popular revolt against the CFA franc are only mentioned so far in the short book. Thus, despite being published this summer, it quickly becomes outdated on everything else a financial statistic.