Abdou Cissé, an expert in actuarial and financial affairs, specializing in bancassurance and managing director of Cisco Consulting, specially dedicated to the evolutions of the economic and financial systems of the African continent, CFA. With a rather unusual approach … For him it is above all to dispel the debate and to focus on the international dimension of money.
Interview by Dounia Ben Mohamed
In recent months, the debate between defenders and defendants of the CFA franc is raging. Even the French press was interested. Does the FCFA live its last hours?
It is true that the ship CFA has taken water from all sides lately. See the French press criticize the mechanisms of functioning of our currency, is proof that a time is really gone. In a multidimensional vision, the CFA franc is situated between those who buy it to survive, those who brand it as a weapon of defense in the international currency war, those who make it a vector for generating foreign exchange through their non-convertible currency, Those who take advantage of it to live above their means and those who have conceived it as a transmission belt between the economies of sub-Saharan Africa and the West. In such a confusing display of the CFA franc, it will be difficult, And even impossible to find a common denominator for all these actors.
It is precisely for you that it is now a question of sifting the debate. What are the arguments in favor of the FCFA and vice versa?
In the view of the CFA’s defendants: a fixed exchange rate regime of a different time, a monetary system for France and African elites, a restrictive monetary policy (inflation target around 2% Economic dynamics), a currency too strong. In the opinion of the defenders of the CFA: the arguments of the defendants based on no study, a strong disinformation campaign orchestrated around the currency, a CFA franc that brings real monetary stability in the zone. Today, all the controversy is Centered on the Franco-African dimension of the CFA franc, while our currency reflects a second dimension, international, which imposes the following synthesis: we do not have to leave a currency that belongs to us because we buy the CFA to the Treasury French as France buys the euro from the European Central Bank (ECB) and we are the only ones (countries in the CFA franc zone) to buy this currency, there is no question of maintaining the functionalities of a Which is not beneficial to the African people, the current global economic context is such that it is preferable to thoroughly reform the mechanisms of the CFA franc (institutions and principles) and take Time to control this currency war that disrupts world trade.
In other words, the FCFA belongs to Africans, but the mechanisms must be reviewed?
To reform the principles, we must first refocus the debate on our needs by avoiding the field of economic ideology. Let us recall that at the end of the Second World War, the West was to be rebuilt. In addition to the Marshall Plan, France has benefited from real monetary flexibility to develop its infrastructure, its industries and finance its social policy without having to borrow on the markets. The CFA franc zone has never benefited from such monetary flexibility since political independence. So, at the stowage level, we are entitled to the same treatment that we must capitalize and claim. Then we should take another look at the mechanism of the operating accounts, as a fractional reserve system that does not say its name. In a model where the BCEAO and the BEAC are commercial banks and the French treasury represents their central bank, the deposit of 50% of our foreign exchange reserves, which is imposed by us, must be compared to the 1% deposit that the ECB European commercial banks. There is in fact an unequal treatment: the French Treasury conceives that working with African central banks is six times more risky than working with European commercial banks. What is the evidence? France does not trust us, it feeds a real suspicion of economic mismanagement and bad credit towards us. However, in view of all the economic and financial events of the last ten years (stock market, banking, economic crisis and sovereign debt) we have several arguments to return this suspicion to the world The Western world and especially to France.
What answers to the Africans who call for the creation of a new currency?
Money is a real reflection of a price for the economy of the associated zone. The idea of creating a new currency is acceptable because it consists precisely in developing a regional project, aiming to put a finished product on the world market. In creating our currency, we are going to realize a project that requires: an awareness of the African people that a monetary zone must be unique, indivisible and that a currency is a public good generating social and political bonds; , Solidarity, a sense of truth, and a real awareness that this project can be achieved; A project management based on resource constraints, budget and time constraints, a business model with a very thorough business case, taking into account all types of possible disaster scenarios, to avoid falling into the same trap The euro, economic sovereignty around a perfect convergence (monetary, fiscal, fiscal and social); A currency with two stallions: the first in-house based on a basket of raw materials and the second on the international basis based on gold (not exactly on the Chinese model but better adapted to our African realities), an enormous acceptance Sacrifices at the beginning of the project, because the others will not leave us the levers, a constant appeal to the international community for the convergence towards monetary stability (why not the return to the gold standard)? The same mistakes Europeans make with the euro: the absence of a common reference frame at the beginning of construction and the absence of institutions capable of arbitrating future imbalances are at the root of all the problems of the single European currency. In order to meet all these conditions necessary for the success of a project to create an African currency, the CFA franc zone must opt for an in-depth reform of its operating mechanisms in order to achieve greater monetary flexibility and to respond to our social and regional needs in accordance with our African realities.
To conclude, to end the polemic, what do you advocate in the short term?
The CFA franc is at the heart of our activities: for the African people to benefit from it, it is necessary to invite our French partners to a bilateral debate on the monetary flexibility that is vital for the zone. Since the beginning of independence, sub-Saharan Africa has not yet started a real construction because it does not enjoy monetary flexibility. Since the CFA franc is pegged to the Euro, we are entitled to any type of monetary flexibility to the euro area and particularly to France. In order to revive their economies, the central banks of the major Western powers have embarked on a long-term pursuit of low interest rate policies and Quantitative Easing (QE) – we must demand
Author: Dounia Ben Mohamed // Photo: Abdou Cissé © Abdou Cissé