THE HISTORY AND FUTURE OF THE CFA FRANC

 

The CFA franc zone was founded by then colonial power France after the second world war. Its aim was to ensure a continuously cheap influx of resources into France.

The zone is divided into two. The west African CFA franc zone has eight members: Mali, Niger, Burkina Faso, Senegal, Côte d'Ivoire, Benin, Togo and Guinea-Bissau. The central African zone has six: Cameroon, Gabon, Republic of Congo, Central African Republic, Chad and Equatorial Guinea.

Popular mobilisation against the currency has been intense in recent years in west Africa.

This led to cosmetic changes to the currency arrangements. For example in 2019, French president Emmanuel Macron and the sitting president of Côte d'Ivoire, Alassane Ouattara, announced the withdrawal of French staff from some of the regional central bank's decision-making bodies. They also waived the requirement – much maligned on the continent – to store 50% of all reserves in Paris as a guarantee to the former colonial power that they wouldn't be wasted on irresponsible fiscal expansion.

Overall, however, the CFA franc has remained more or less the same and France has not been willing to leave the arrangement of its own accord. The old colonial attachment and supposed developmental benevolence has carried the day.

But the conditions for major change are in place. The Alliance of Sahel States between the junta-led governments of Mali, Burkina Faso and Niger has stated its intention to introduce the Sahel as a new regional currency. Whether this initiative – and the Senegalese plan for a national currency – will amount to a full break-up of the CFA franc zone and its terminal decline will depend on how well they plan and execute the transition to several new currencies or a new one without any French involvement.

Historically, as shown by Fanny Pigeaud and Ndongo Sylla in their book Africa's Last Colonial Currency: The CFA Franc Story, serious attempts at leaving the CFA franc since its inception in 1948 have been sabotaged by France.

To read the complete article, see:
CFA franc: conditions are ripe for replacement of the west African currency rooted in colonialism – expert (https://theconversation.com/cfa-franc-conditions-are-ripe-for-replacement-of-the-west-african-currency-rooted-in-colonialism-expert-226969)

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