15 continental African countries, one currency. A predecessor to the future monetary union we now see in Europe? I wish. Since 1945, these countries have been strangled by the monetary, financial, and economic yoke of their colonial master: France.
After the conference of Berlin, where European powers “diplomatically” parted Africa amongst them like a cake to avoid any war and aimed at taking over the wealthiest continent on earth, France was given control over much of the Sahel, North and West Africa. However, six odd decades after (flag) independence, the situation hasn’t changed much. France still has a heavy military presence on the continent, with permanent bases in Burkina Faso, Niger, Mali, and Senegal, to name a few countries.
But more insidious than this is the imposition of a monetary system managed by Paris: the CFA Franc. The currency initially stood for Franc of the French Colonies in Africa, and it was a sub-currency to the French franc. After “independence,” the CFA was renamed to make it sound less… colonial. It now stands for African Financial Community for West Africa (Franc de la Communauté Financière Africaine) and Financial Cooperation in Central Africa (Franc de la Coopération Financière en Afrique Centrale). The 15 countries that use it are Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Comoros, Côte d’Ivoire, Equatorial Guinea, Gabon, Guinea-Bissau, Mali, Niger, Republic of the Congo, Senegal, and Togo. They are divided into three franc zones: West Africa, Central Africa, and the Comoros. Although they all use the same currency, they are not interchangeable. They must go through the euro before being converted into another form.
Why am I mentioning the euro, you may ask? First, let’s take a step back and look at the history and features of this colonial currency so you understand what we’re dealing with.
In 1939 France created the franc zone to better control its colonies and ensure that it could have easy and cheap access to raw and natural resources even during times of war. Six years later, on 26 December 1945, 76 years ago this month, the franc of the French Colonies of Africa (Franc des Colonies Françaises d’Afrique) was born.
Here are some of its appalling characteristics:
- Pegged to the French franc and now to the euro
- Fixed exchange rate (€1 = FCFA 655.957)
- The money is manufactured in France (Chamalières and Pessac)
- Guaranteed by the French treasury which owns between 50% and 65% of the currency
- CFA Franc CANNOT be converted into euro when in Europe
- French officials have veto rights within the Central Bank of West African States – Banque Centrale des États de l’Afrique de l’Ouest (BCEAO) and the Bank of Central African States – Banque des États de l’Afrique Centrale (BEAC)
- The monetary policy is set by the European Central Bank
You don’t have to be an economist to understand that the concept of a fixed exchange rate is a bit strange. If you have ever converted money, you’ll know that the amount of money you get in exchange for another currency constantly changes (and you may wait for more favorable market conditions to make the best out of the conversion and get the most money). For the countries using the CFA Franc, a fixed parity means strictly controlling the amount of money in circulation (aka inflation). Inflation is capped at 2% for West Africa and 3% for Central Africa. Little money circulation leads to a limitation in loans granted by banks to businesses, leading to few credits, few investments, disastrous infrastructure, and no development. Besides, because the euro is the anchor currency of the CFA, the latter is considered a strong currency. This strength is a great disadvantage for the countries of the franc zone because it doesn’t reflect their economy but that of the euro area. It makes importation way cheaper than producing locally, which, in return, stunts internal growth and development.
The French treasury guarantees the convertibility rate of the CFA Franc. In other words, it makes sure that the CFA is a credible currency on the world stage and that it can be converted into other currencies. Two problems here: the first one is that before being converted to the naira, cedi, dollar, pound sterling, or the CFA belonging to other CFA zones, the money has to be turned into euro first. From remittances from the diaspora to business deals with international partners, any transaction goes through and is overseen by Paris. The second issue is that to have this guarantee, the countries of the CFA zone have to deposit part of their money into the French reserves. As if that wasn’t enough, French representatives sit on the board of the two African central banks and have veto rights. Although their number has decreased, even one person with veto rights can block any reform that would not benefit the Metropole.
So let’s quickly recap the points listed above:
- France guarantees convertibility but CFA needs to go through the euro first and it pays for this guarantee with their own money.
- The CFA reflects the European reality and not the economy of the 15 African countries effectively preventing development.
- The 3 CFA zones don’t have interchangeable currencies but according to Paris this currency boosts integration and cooperation.
- Every transaction is monitored by France and the French can stop any monetary reform.
So much for freedom, economic stability and integration, independence, and growth.
Another aspect concerning the CFA franc is the free flow of capital. This means that foreign companies and businesses (mainly French, of course) can invest in West and Central Africa, and the Comoros, then repatriate all their gains to their countries for free. There will obviously be no interest or benefit in re-investing in local realities where the people and local businesses will see the money and surplus value they created to take flight.
According to Macron, each African president is free to leave the franc zone and mint their own money. Except that they tried, and they were either killed or succumbed after Paris orchestrated coups d’états against them: Sékou Touré of Guinea was a victim of the operation “Persil.” France destabilized the Guinean economy by printing fake notes and introducing them into the market. Modibo Keita of Mali was ousted by Moussa Tarawele, who served in the French army. Although Mali did leave the CFA Franc in 1962, it ultimately reintegrated into the franc zone in the late 60s. It made the CFA Franc its currency again in the early 80s. Sylvanus Olympio of Togo was killed by Togolese former french legionaries when he tried to reach for monetary independence. The most recent case is that of Laurent Gbagbo of Côte d’Ivoire. Gbagbo defied France, and as a response, after multiple coups attempts, the colonizer closed all the french banks on Ivorian soil (French businesses are rife on the continent) and blocked all financial transactions between the West African country and the world. Closed banks mean no money for people or businesses. This, however, triggered an unexpected reaction from the Ivorian president. He, in fact, decided to mint his own money. France couldn’t let that happen, so the French troops stationed in the country attacked Ivorian soldiers and arrested Laurent Gbagbo. He was accused of committing crimes against humanity and sent to The Hague. Only recently has he been released.
If you paid attention to the revolts in Senegal, which took place at the beginning of 2021 when the current president Macky Sall’s opponent was arrested, you would have noticed that protesters targeted French businesses and companies such as supermarket chains Auchan and Total. Sall and the Senegalese elite have been friends of France for a long time. But the people want to get rid of any reminder of French economic control and grip in Africa. They bleed out African resources, make amazing profits, and let the population deal with unemployment, poverty, inadequate health and education systems. So these French firms were rightfully looted and burned down.
In this day and age, people are realizing how little they can lean on their political leaders for revolutionary change. African heads of state never mention the CFA Franc. Quite the opposite, presidents like Ouattara of Côte d’Ivoire (another country that loves France) praise the currency, the stability, and the credibility they bring to the continent.
There is a new generation now, however, linked by struggle and social media and who is sharing the hidden colonial history of the CFA Franc. NGOs like Urgences Panafricanistes founded by Kemi Seba, professors like Nicolas Agbohou, and economists like Kako Nubukpo are making this difficult topic more mainstream and accessible to the masses.
The African youth is fed up with this colonial vestige. It’s time for the franc zone and CFA Franc to disappear and for France to dégager (f*** off).
For more detailed information about the CFA Franc, read Fanny Pigeaud’s and Ndongo Samba Sylla’s “Africa’s Last Colonial Currency: The CFA Franc Story“, and their interview with the Jacobin mag.