Faith Nyasuguta
France’s political influence in Africa has been waning, evidenced by nations such as Mali, Burkina Faso, and Niger expelling French troops and seeking new alliances, signaling a departure from their former colonial ruler.
Despite this political shift, France maintains significant economic influence, particularly through its control over currency. Notably, fourteen African countries continue to use currencies printed in France, thereby remaining financially linked to the nation.
The CFA Franc: Historical Context and France’s Role
Established in 1945, the CFA franc was designed to stabilize the economies of France’s African colonies. Post-independence, it remained the official currency for multiple nations.
The Bank of France has historically been responsible for producing CFA franc banknotes and coins at its Chamalieres facility. Currently, the CFA franc is divided into two monetary zones:
West African CFA franc (XOF): Used by eight countries within the West African Economic and Monetary Union (WAEMU).
Central African CFA franc (XAF): Adopted by six countries that are part of the Central African Economic and Monetary Community (CEMAC).
| West African CFA franc (XOF) | Central African CFA franc (XAF) |
|---|---|
| Benin | Cameroon |
| Burkina Faso | Central African Republic |
| Guinea-Bissau | Chad |
| Ivory Coast | Republic of Congo |
| Mali | Equatorial Guinea |
| Niger | Gabon |
| Senegal | |
| Togo |
Both currencies are pegged to the euro, and their issuance is still controlled, at least in part, by France.
Proponents of the CFA franc highlight several benefits:
Monetary Stability: The fixed exchange rate with the euro has historically ensured low inflation rates, providing a stable economic environment.
Facilitated Trade: A common currency among member countries simplifies trade and investment within the region.
Investor Confidence: The guarantee of convertibility into a strong international currency like the euro reassures foreign investors.
These factors have contributed to the relative resilience of Franc Zone countries compared to the rest of Africa during economic challenges.
Criticism & Calls for Monetary Independence
Despite its perceived advantages, the CFA franc system faces significant criticism:
Economic Sovereignty: Critics argue that the system limits the monetary policy autonomy of member states, as key decisions are influenced by France and tied to the eurozone’s economic conditions.
Colonial Legacy: The requirement for African nations to deposit a portion of their foreign exchange reserves with the French Treasury is viewed by some as a lingering form of colonialism.
Economic Performance: Some analyses suggest that countries which exited the franc zone and established their own currencies, like Morocco, Tunisia, and Algeria, have experienced stronger economic growth compared to CFA franc users.
Efforts Toward Reform
In response to growing dissatisfaction, there have been initiatives to reform the CFA franc system:
Introduction of the Eco: West African leaders proposed the Eco as a new regional currency to replace the CFA franc. However, its implementation has faced delays, and debates continue regarding its structure and the extent of France’s involvement.
Policy Adjustments: Reforms have been made to reduce France’s control, such as decreasing the percentage of foreign exchange reserves that member countries must deposit with the French Treasury.
These efforts reflect a desire among African nations to achieve greater monetary independence and redefine their economic relationships with France.
While France’s political influence in Africa is diminishing, its economic ties, particularly through currency control, remain significant. These African countries still using the CFA franc show how challenging it is for them to gain full control over their own economies. As discussions about monetary independence continue, the balance between maintaining economic stability and asserting financial autonomy remains a central challenge.
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