Reforms Of Colonial Currency In West Africa

On 24th February, Kémi Séba, an anti-colonial and pan-Africanist activist responsible for the formation of the Anti-CFA Front, is set to face trial in Dakar, Senegal, for the illegal burning of a 5,000 CFA franc note at an anti-Françafrique rally held in Dakar on 19th August 2017. Séba was initially acquitted for the crime, however the Central Bank of West African States (BCEAO) appealed the acquittal. The trial is one of many encounters Séba has had with the law in his fight to free Western and Central Africa from what he calls a French “colonial economic and political scandal.”

The movement is centred around the abolition of the African Financial Community franc (CFA franc); a currency France created for its once colonised sub-Saharan African countries in exchange for their independence. Many view the CFA franc as a colonial tool of political and economic interference from France. The movement has gained traction amongst civil society across Burkina Faso, Mali, Niger, Benin, Cameroon, Senegal, and other neighbouring countries that also use the CFA franc. Anti-CFA protests, which have spanned across decades, have not been made in vain. On 21st December 2019, French President Emmanuel Macron and Ivory Coast President Alassane Ouattara announced reforms for the West African CFA franc. However, as details of the reforms emerge, concern has been raised surrounding the artificial nature of them.

There are 14 nations that currently utilise the CFA franc, namely, Benin, Burkina Faso, Cameroon, the Central African Republic, Chad, the Republic of Congo, Gabon, Equatorial Guinea, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo. They are divided into two economic blocs: the West African Monetary Union (WAMU), and the Central African Economic and Monetary Union (CEAMU), that use the West African CFA franc and the Central African CFA franc, respectively.

The main features of the current monetary cooperation agreement critics discern reminiscent of French colonialism are the requirement of each economic bloc’s central banks to deposit 50 per cent of their exchange reserves with the French Ministry of Finance, and the hard-pegging of the CFA franc to, initially the French franc, and then eventually the euro.

The centralization of each of the bloc’s exchange reserves within France means all conversion operations from the CFA franc into other currencies have to pass through France. Ndongo Samab Sylla, an economist from the Rosa Luxemborg Foundation, has argued this policy robs Western and Central Africa of monetary and fiscal independence. Sylla, along with other economists, have also identified the detrimental effect hard-pegging of the CFA franc has had on economic growth and development throughout Western and Central Africa. They claim the hard-pegging has often led to overvaluation of the currency, meaning the region’s exports are likely to be relatively expensive, and imports cheaper, limiting trade abilities and opportunity for GDP growth.

Sylla told ZE-Africa News, “when you have a currency set to [a] strong currency like the euro, it’s easy to import. But when you want to export, your products cannot compete with other foreign countries.” The hard-pegging of the CFA franc to the euro also ties Western and Central Africa to the eurozone’s monetary policies, which many critics believe to be unsuitable for the region as it fails to prioritise investment and jobs which are badly needed. As Demba Moussa Dembele, a Senegalese economist told The East African the hard-pegging of the CFA franc to the euro “requires our central banks to follow very restrictive monetary policies. The priority of African economies is not the fight against inflations- they need investment and jobs”.

Furthermore, the freedom of transfer of capital and income within the franc zone has drawn criticism regarding the potential it creates for French companies to exploitatively repatriate revenue and capitals without any foreign exchange risk. Finally, the appointment of French personnel with statutory veto power on the boards, monetary policy committees, and control organs of the central banks of each bloc has also been labelled controversial.

Reforms put forward by Macron and Ouattara will affect only the WAMU, whose central bank is The Central Bank of West African States (BCEAO). The reforms include the end of the French presence on the BCEAO board and monetary policy committee, and the WAMU’s banking commission. Moreover, the BCEAO will no longer be obligated to deposit half its foreign exchanges with the French Ministry of Finances. Finally, the CFA franc’s name will be changed to the ‘eco,’ with plans to adopt the newly named currency this year.

Significant gaps in the reforms exist. Former BCEAO Governor Philippe Henri Dacoury-Tabley told Jacobin in January that the reforms announced were a “sleight of hand”. Foremost, they fail to address and correct the ramifications of the hard-pegging of the currency on the growth and development of Western Africa. Additionally, despite relinquishing a degree of power from the BCEAO board and monetary policy committee, Sylla has revealed France plans to designate an “independent” representative at the BCEAO who will be in charge of the day-to-day management of its exchange reserves. Critics fear the reforms are simply an act to relinquish the most overtly colonial features of the CFA franc, and fail to implement monetary and exchange rate policies that will truly benefit the region, and free it from the grips of French and European control.

Coinciding with demands for reforms of the CFA franc, are calls to rid West Africa of French military intervention. Currently France has roughly 4,500 troops deployed in the region to fight a growing terrorist threat from groups such as al-Qaeda and Islamic State. Despite actions from the French military, the Daily Sabah reported in January the eruption of conflict in Mali in 2012 has quickly spread to its neighbouring countries, Burkina Faso and Niger, while the Washington Post reported terrorist attacks in Sahelian countries have increased fivefold since 2016.

French forces’ inability to bring the violence under control has sown suspicion among the population regarding whether France’s intentions are genuine or just another act to maintain influence in the region. Demonstrations were held in the Malian capital, Bamako, on January 10th to protest against the presence of French troops, with demonstrators carrying posters reading, “Down with France. France is a break on our development.”

Kémi Séba was detained for four days in Burkina Faso on his way to attend the protest, posting on his Instagram on January 9th that he had been stopped from boarding an Air Burkina flight to Bamako. Three days after the protest, President Macron held a security summit in PAU, France, where he hosted his counterparts from Mali, Niger, Burkina Faso, Chad, and Mauritania to discuss security in the region. He announced the deployment of a further 220 troops to West Africa, but only after issuing a stark warning to his West African counterparts in the lead up to the summit: “I can’t, nor do I want French soldiers on the ground while there is anti-French sentiment that is sometimes held by the leaders,” reported Bloomberg of the French President.

If President Macron is serious about removing neo-colonialist measures within Central and Western Africa, criteria missed in discussions for reforms of the CFA franc must be revisited. Furthermore, if governments within Western and Central Africa are serious about removing neo-colonialist policies, they must not silence citizens who are currently calling for such actions, and France must not use the threat of the withdrawal of military support to pressure them to do so. The silencing of critics, and continued economic interference only risks contributing greater to violence in a region that has already suffered enough.

Katherine Everest


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