Created just over 70 years ago, the CFA currency is today one of the most virulent subjects of discord in the black continent for, by comparing the CFA countries with their English-speaking neighbors, which enjoy relative monetary freedom such as Ghana and Nigeria, the situation seems to be unbalanced. Thus, there has been opposition between the pro-CFA and those who want to break with it, all pursuing a common goal: the continent’s financial autonomy and economic prosperity.
A Difficult comparison
Alongside the 14 French-speaking African countries of the CFA zone, there are financial giants which, before the price crisis in the international market, dominated the continent’s economy for a long time. Nigeria (Naira), Ghana (Cedis), South Africa (Rand)… are the best examples. Thus, these three countries enjoyed economic growth of 8% between 2008 and 2009, while the average growth for the CFA zone countries was only 3.9%. But today, while “the growth in the continent has dropped to its lowest level in 20 years,” according to the World Bank, that in the CFA zone has been stable, and remains at a little more than 3%.
These figures help conclude, for some people, that the CFA zone countries’ economies are less prolific because they are not autonomous but much more resilient to external shocks. And two camps are clearly visible in these data, worth for comparison: those who point out the flowering autonomous economy to abolish the CFA and those who, because of its resilience to external shocks, are maintaining it.
Maintaining the CFA for better stability
“If we look at a long period, 25-30 years, this currency has been useful to the populations. But listen, what else do we want? Maybe the word CFA hinders, so it should be changed! But on the substance, I consider that our option is the right one,” said Alassane Dramane Ouattara, President of the Ivory Coast and pro-CFA. The Ivorian Head of State is convinced that the currency leads the countries that share it to a full economic booming. According to him, the Franc zone countries have experienced the most continuous growth over a long period and the lowest inflation rate. It is “one of the few zones where the currency coverage rate is almost 100%,” he said.
Like him, many people argue that the CFA is a driving force for regional integration in West and Central Africa, fostering trade and ensuring macroeconomic stability. “The crises in the 14 CFA zone countries are not linked to the currency. They result from the shock created by the fall in raw materials, “said Thiemoko Meyhet Koné, Governor of the Central Bank of West African States (CBWAS). Like the supporters of the CFA, he thinks the currency must be maintained for more stability. Conversely, the anti-CFA camp is held at the extreme antipode.
Review or abolish: for greater freedom
For the Chadian President Idriss Deby Itno, the CFA must be abolished, or the monetary cooperation agreement that binds France to the CFA countries zone must be reviewed. “I believe it is a courageous decision that our French friends have to take … Some clauses are outdated and pull Africa’s economy down. These clauses must be reviewed in the interest of both Africa and France.”
Like him, several African economists think it is unfair to peg the CFA to the euro. According to them, the fact of guaranteeing the fixed parity between the euro and the CFA, African States must deposit 50% of their foreign exchange reserves to the French Treasury is impoverishing. “This clearly means that exports are taxed and imports subsidized. Look, with the exception of the Ivory Coast which benefits from cocoa revenues, all West Africa countries’ trade balances are seriously in deficit,” says the Togolese economist, Professor at Princeton and Oxford, Kako Nubukpo. According to him, to guarantee this monetary stability, the CFA zones’ central banks could only put 20% of their reserves to the French Treasury. Similarly, Mamadou Koulibaly, an Ivorian economist, explains that the withdrawal of African countries from the CFA monetary zone is no longer “an option for them … but a vital, logical and historical necessity”.
The CFA currency has now become the symbol of a perennial fracture line between those who wish to preserve it for stability and those who want to get rid of it, as it is seen as the ultimate avatar of economic neo-colonialism. Jaurès Sogbossi, representative of the movement “No to the CFA currency” summarizes the political scope of the debate: “We criticize the CFA currency for it makes France rich and Africa and Africans poor.” The outcome of the debate will give orientations to the future of the CFA. Francois Hollande, the French president, said recently that he was “open to all proposals by the CFA member States…” He thus replied to Roch Kaboré, the President of Burkinabe who had declared at the opening of the International Africa Development Forum (FIAD) that it is “a big challenge to the presidents to think about so that together we can have a currency”. Through these remarks, it is clear that the future of the CFA is now clearly known. Now, we should know how to close, continue, or only review its pages.