CFA Franc: The ‘colonial currency’ keeping 14 African nations on a leash
France’s financial control over the African nations is a relic of a shady past. Only African initiatives imagined and implemented by Africans will pave the way for the continent's awakening.
Written for TRT World In 1962, when Modibo Keita, President of the newly-independent Mali, decided to create the Malian Franc, the immediate result was for his neighbours, themselves freshly independent but members of the CFA Franc zone, to raise commercial barriers and isolate him economically.
A year later, his Togolese counterpart Sylvanus Olympio – who planned an independent monetary project for his newly-independent country – was assassinated by a group of military personnel trained by France. Among them was Etienne Gnassingbe Eyadema, the man who would later become the President of Togo from 1967 until his death in 2005.
Created by France in 1945, the CFA Franc was meant to control the cost of access to raw material from the colonies and to shield France’s pre carre from the other monetary bloc controlled by the UK, the ‘sterling area’.
Unlike its British counterpart, which disappeared by the second half of the twentieth century, the CFA Franc remains to this day the anachronistic currency in place in 14 African countries regardless of their access to independence from France decades ago.
The tremendous advantages offered to France and the strict terms and conditions of the CFA Franc explain why the currency is referred to as a tool of “monetary servitude”, the “invisible tool of Francafrique” (in reference to France’s neocolonialism in Africa) or, in an absolute plain term, the “colonial currency”.
The CFA Franc is in use in three distinct areas, each with its own version of the currency:
The West African CFA Franc or the African Financial Community Franc, emitted by the Central Bank of West African States and used by Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo.
The Central African Franc or the Financial Cooperation in Central Africa Franc, issued by the Bank of Central African States and used in Cameroon, Central Africa, Chad, Equatorial Guinea, Gabon and the Republic of Congo.
The Comorian Franc, used by the independent Union of Comoros alone. (valued at 0.0020 euros)
In all cases, the CFA Franc offers France’s guarantee of convertibility, fixed parities (then with the French Franc, today with the euro), free transferability and the centralisation of foreign exchange reserves. In return, the issuance and printing of money are done in France, and the countries using the CFA Franc are obliged to deposit at least 50 percent of their foreign exchange reserves at the French Public Treasury.
Given the vast disparities between African and French economies, the pegging of the region’s currency to a strong currency like the French Franc yesterday and the euro today is unnatural and has direct implications on CONTINUE READING ON TRT WORLD