The CFA franc is the currency used today in 14 African countries.
‘CFA franc’ is a term covering two currencies: the West African CFA franc, used in eight West African countries, and the Central African CFA franc, used in six Central African countries.
They are separate, but they have the same value, and are effectively interchangeable.
The six Central African CFA franc countries:
Cameroon
Central African Republic
Chad
Republic of the Congo
Equatorial Guinea
Gabon
The eight West African CFA franc countries:
Benin
Burkina Faso
Ivory Coast
Guinea-Bissau
Mali
Niger
Senegal
Togo
Almost all of these countries were under French colonial rule (apart from Equatorial Guinea, and Guinea-Bissau).
You can clearly see a similar shape when comparing maps:
By 1960, all of these countries had been officially decolonised by France, and had declared their independence.
Yet since 1945, France had been working on a new currency for these newly independent countries – the CFA franc.
The CFA franc for many remains a symbol of neocolonialism, and is an example of how a currency and exchange rates can be used to secretly control entire nations.
The necessity of a new currency
Post Bretton Woods, the French franc was devalued when it was fixed to the US dollar.
As the French franc was the currency of these African nations, they also would be subject to the same devaluations.
But France had been significantly weakened after the war, and couldn’t be certain they’d stay in control. The First Indochina War (1946-1954) and the Algerian war of Independence (1954-1962) demonstrated that colonial France could be defeated, and revealed the days of the empire were numbered.
Attention turned to West and Central Africa, who were still under rule.
But instead of crushing any rebellions or attempting to assert dominance, the French government decided to adopt a form of neocolonialism in order to stay on top – making a grand spectacle of giving independence, but still running things from behind the scenes.
Boubacar Boris Diop of the New African remarked that:
It was wiser to grant nominal independence to its colonies in Sub-Saharan African while keeping a tight rein on them. Gradually, the French Empire switched from brutal overseer to absentee landlord.
This is exactly the time when the CFA franc was introduced.
Introduction of the CFA franc
After the devaluation of the French franc, the French government decided to introduce a new currency to Africa – the CFA franc.
Even the naming has been fudged a little.
Today, CFA stands for ‘Communauté Financière Africaine’ (African Financial Community).
But between 1945 and 1958, it stood for ‘Colonies Françaises d'Afrique’ and for a short time after 1958, they changed ‘Colonies’ for ‘Communauté’ (Community).
And ‘introduction’ of the CFA franc is a gentle term.
To even begin the process of independence, all countries had to enter a new organisation called the French Community and accept the CFA franc as their currency.
They had the option to say no, but Charles de Gaulle threatened this as “independence through secession”.
Upon its introduction in 1945, all countries voted yes (except Guinea, which we will cover in a later newsletter) and accepted the CFA franc as their currency.
This was spun as a great gift by the French government, one that would ‘protect’ Africa from the devaluation of the French franc.
French finance minister René Pleven was reported to have said:
In a show of her generosity and selflessness, metropolitan France, wishing not to impose on her far-away daughters the consequences of her own poverty, is setting different exchange rates for their currency.
Exchange rate & control
The real reason was to maintain an exchange rate between the two currencies that was preferable to France.
From 1945 to 1948, one CFA franc was equal to 1.70 French francs, and in 1948 it was raised to CFA 1 = 2 French francs until 1959.
This is important, because by making the French franc less valuable, it’s cheaper for Africa to buy from France.
By keeping this exchange rate, it means French exports are cheaper, and therefore more competitive with local business. France needed this to maintain its export economy, and it made CFA franc countries reliant on French exports.
Another rule for the CFA franc, which is still enforced today, is that countries using this currency are required by law to deposit a minimum of 50% of their international reserves into the French treasury.
There are also other restrictions, such as limitations on spending and cover amounts.
This means that France controls the economies, and allows them to grow only under their own prosperity.
Françafrique
François-Xavier Verschave, a French economist and critic, coined the term ‘Françafrique’ to describe this ‘absentee landlord’ control that France has put on its former colonies.
Diop described Françafrique as “the ultimate symbol of a confiscated, perverted sovereignty.”
It has also been described as “the most blatant example of functioning neocolonialism in Africa today and a critical device that promotes dependency in large parts of the continent.”
Françafrique is a good pun too.
“Françafrique” also sounds exactly the same as “France à fric” which means “France from cash / a source of cash for France”.
The uneven CFA franc remains at the heart of Françafrique, and is a perfect example of how a currency is used as control.
CFA franc countries are monitored and controlled from the shadows simply by using a currency. In many ways, a currency exists for this purpose: to ensure the running of a society in a particular way.
Debate
Some economists support the CFA franc, saying it provides economic stability, and also maintains a stable peg with the euro.
All countries are technically free to leave the CFA franc if they desire, and adopt their own currency, as Guinea did in 1945.
For example:
Mali replaced the CFA franc with the Malian franc in 1962 (but readopted in 1984)
Mauritania replaced the CFA franc with the ouguiya in 1973
Comoros replaced the CFA franc with the Comorian franc in 1975
Madagascar replaced the CFA franc with the Malagasy franc in 1976
However, all of these countries have remained connected to the French central bank, some with almost identical restrictions in place.
The benefit of the CFA franc is hard to measure, as political and civil unrest smudges over a lot of economic growth. Furthermore, potential benefits of never having introduced the CFA franc can now never be known.
The same way that the World Bank and IMF ensure that their influence is always considered a benefit, the CFA franc fits into exactly the category as a true cadeau empoisonné.
The Eco
Despite the apparent hold on the African economy, there are plans to break free.
African nations have been wise to the negative aspects of this currency since the beginning, but in 2000, announced a formal plan to adopt a new currency for Africa.
In 2019, it was announced that the CFA franc would be replaced with new currency called the Eco – named after the Economic Community of West African States, or ECOWAS.
Ivory Coast were ready to trial the currency in 2019, but the Covid-19 pandemic derailed any plans for at least five years.
ECOWAS has since agreed on a new roadmap that will see the release of the Eco in 2027.
From the other side, France has also expressed interest in promoting African sovereignty, with Emmanuel Macron speaking of ending the neocolonial arrangements in place, stating in Gabon in 2023 that “the days of la Françafrique are well and truly over.”
Only time will tell how genuine this is, and how successful the Eco will be. We will be following the development of the Eco on this newsletter.
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Additional sources
https://www.politico.eu/article/france-emmanuel-macron-africa-reset-strategy-francafrique/
https://www.france24.com/en/africa/20210619-west-african-regional-bloc-adopts-new-plan-to-launch-eco-single-currency-in-2027
https://en.wikipedia.org/wiki/Fran%C3%A7afrique
https://blogs.lse.ac.uk/africaatlse/2017/07/12/the-cfa-franc-french-monetary-imperialism-in-africa/
https://thecorner.eu/news-the-world/world-economy/francophone-africa-the-polemic-over-the-cfa-franc/57828/
https://www.researchmedia.org/franc-cfa-saga-monnaie-neo-coloniale-eng/