It’s time to end the CFA franc

For France's former colonies in Africa to enjoy true independence, they need to control over their own money and budgets.

Emmanuel Macron, French President.

The CFA franc, originally the Franc des colonies françaises d’Afrique, is an instrument of monetary and financial domination formally set up for France’s African colonies on December 26, 1945 by Charles de Gaulle. Today, having survived the decolonization struggles, it operates as a political tool to control African economies and polities and also as a device for transferring, with minimal risk, economic surpluses from the African continent to France and Europe. The mechanisms laid during the colonial era remain essentially unchanged.

There are fifteen countries belonging to the Franc zone in Africa. Eight countries in West Africa currently share the Franc de la Communauté financière africaine (Benin, Burkina Faso, Cote d’Ivoire, Niger, Senegal, Togo, Mali and Guinea Bissau); another six in Central Africa share the Franc de la Coopération Financière en Afrique Centrale (Cameroon, Chad, Central African Republic, Congo Republic, Gabon and Equatorial Guinea); and, finally, the Comoros uses the Comorian franc.

Thanks to the mobilization of many intellectuals and Pan-Africanist movements, the CFA Franc has been trending lately, especially in French-speaking media. The question being debated is a practical one: How can these countries get out of the CFA franc? There are two ways for exiting the CFA franc’s logic of domination: the “nationalist exit” and the “Pan-Africanist exit.”

A nationalist exit refers to the individual exit of countries that will create and use their own national currency. This was the path followed by former members of the Franc Zone, such as Guinea, Algeria, Morocco, Tunisia, Madagascar, Mauritania and Vietnam after their independence from France.

The Pan-Africanist exit is the one that initially maintains monetary integration in the two franc blocs, but excludes France. It, therefore, requires that all African countries in the Franc Zone jointly demand the abolition of the current operation accounts conventions with France. These are agreements through which France’s Treasury accepts to guarantee the so-called unlimited convertibility of the CFA franc and the Comorian franc, provided, among other conditions, that African countries deposit half of their foreign exchange reserves in “operations accounts” at the French Treasury! Following independence, African countries were required to deposit 100% of their foreign exchange reserves; this was lowered to 65% in 1973 and to 50% in 2005.

In its current form, the nationalist exit is problematic. It might be financially expensive in the short run. It will take time, could generate a lot of uncertainty and risk, and is not immune to sabotage. Let us not forget the counterfeit French secret service bills that flooded the Guinean economy after Sekou Touré put in place a national currency in the 1960s. Let’s look at the current fate of former Ivorian President, Laurent Gbagbo, in conflict with France for wanting to leave the CFA franc at some point. Or that of Muammar Gaddafi. Among the reasons for the military intervention in Libya was Paris’s need to nip in the bud Gaddafi’s Pan-African currency project, one of whose aim was to rid Africa of the CFA franc.

The nationalist exit is unlikely because the current crop of African French-speaking leaders do not have enough courage to challenge France individually. They pale in comparison to a figure like the late Thomas Sankara, the murdered President of Burkina Faso (1983-1987), who openly challenged France.

Given these limitations, the Pan-African exit seems to be the least risky and more interesting scenario. It can take place in two steps. The first step is that of the exit of France (or FREXIT). The African countries collectively will ask France to “leave,” by denouncing the monetary cooperation agreements and the operation accounts conventions between France and the countries in the Franc Zone. This demand is all the more legitimate given that France doesn’t actually guarantee the CFA francs convertibility, contrary to the erroneous claim, made by France’s President Macron during his official visit to Burkina Faso in November 2017. The foreign exchange reserves accumulated by African countries themselves have always guaranteed de facto the CFA franc’s convertibility.

This proposal to leave the logic of monetary domination can only succeed if two preconditions are fulfilled. First, a massive mobilization of African populations in general and Pan-African social movements in particular, which will make it possible to cope with the lack of “political will” of French-speaking African heads of state. Second, a distancing of Pan-African social movements from the single currency project in West Africa. This project, which is unlikely to see the light of day, is used by some African heads of state to put the social movements fighting against the CFA franc to sleep. For others, it is an intellectually lazy but politically convenient solution to get out of the CFA franc. In reality, the West African single currency is a project of monetary integration along neoliberal lines similar to the Euro. Just like the Euro, a single West African currency risks reproducing many disadvantages of the CFA franc system and accentuating the inequalities between African countries. A single currency is always problematic in the absence of political unity and fiscal unity in particular. These are the lessons of the Euro and that of its unacknowledged ancestor: the CFA franc.

Africans must imperatively get rid of the neocolonial relic that is the CFA franc. In doing so, they must also avoid having to choose between two evils.

Further Reading