The CFA franc originated as currency of the French colonial territories in Africabut it is actually currently made up of two distinct coinseven if absolutely interchangeablerespectively called “West African CFA franc” (in French: franc Communauté Financière Africaine) and “Central African CFA franc” (in French: franc Coopération Financière en Central Afrique), used as official currencies by 14 African States and printed and issued respectively by the “Central Bank of West African States” (Banque Centrale des États de l’Afrique de l’Ouest – BCEAO) and the “Bank of Central African States” (Banque des États de l’Afrique Centrale – BEAC). This is a currency accused by many to be one instrument with which the France effectively maintains a partial control on its former colonies: in fact, although it has contributed to reducing the monetary volatility In the African states that use it, thanks to it and other policies, Paris promotes its influence and its exports in the area.
Origins and history of the CFA franc
Officially created on December 26, 1945until 1958 the currency was called “franc of the French colonies of Africa” (franc Colonies françaises d’Afrique). In the period between 1958 and 1960 it changed its name to “franc of the French Community of Africa” (franc Communauté française d’Afrique) and finally from 1960 to today the two currencies described in the introduction have been introduced. The superficial reason that led France to opt for the introduction of this currency was the need to promote the economic growth of the African territories under its control. This declaration of identity remained in place even in the post-colonial era, and even today the CFA franc is presented as an indispensable instrument for ensuring the macroeconomic stability of the region, in particular by keeping an eye on theinflation.
What are the characteristics of the CFA franc and who uses it?
At the time of its introduction, the CFA franc had a fixed exchange rate with the French franc equal to 1:1.7 which in 1948 became 1:2. From that moment on, excluding the 1994 devaluationthe value of the CFA franc merely reflects the relative value of the French currencyfirst the franc and then theeuro. Currently 1 euro is equivalent to 655,957 CFA francs and this fixed exchange rate system is guaranteed by France. Currently the countries that have the CFA franc as their official currency are 14: Senegal, Mali, Ivory Coast, Burkina Faso, Togo, Benin, Niger, Chad, Cameroon, Central African Republic, Cameroon, Congo, Gabon, Equatorial Guinea and Guinea-Bissau. The first 12 countries mentioned are former French colonies while the last two are former Spanish and Portuguese colonies respectively. The states belonging to the monetary area, according to 2023 data, have a combined population of at least 230 million inhabitants and a GDP equal to $313.7 billion.
Why is the CFA franc disputed?
One of the criticisms The most ferocious accusation that is made, even in Italy, against the CFA franc is that, beyond the superficial declarations, it is nothing more than a tool at France’s disposal to carry on a neocolonial politics to the detriment of his former African possessions. On the other hand, his defenders highlight how, from the moment of its introduction to today, it has saved its users, from a macroeconomic point of view, monetary volatility (i.e. a large change in the value of the currency) experienced by other states in the region.
Although this last argument has, from the point of view of mere economic theory, its value, it cannot be said, for example, that the CFA franc has favoured theeconomic integration of the potentially enormous ex-French West and Central African market given that to date the trade relations (especially in raw materials) existing between these countries and France (and for some years also with China) are more consistent than the trade between the African countries themselves. Not only that, the fixed exchange rate system was probably one of the reasons that prevented those countries from creating a viable manufacturing sector from the bottom up because the imports of finished products from France (favored precisely by the fixed exchange rate) have done unfair competition for local products.
Finally, it must be remembered that a currency, however much talked about, is still only a “tool” that acquires positive or negative value depending on whether it is inscribed in a certain context. In the case of the broader context ofset of policies formulated over the decades by France towards its former colonies in West and Central Africa (corruption of local elites, political assassinations, financing of coups d’état, direct military interventions, contracting of loans that quickly turned into onerous debts and so on) it is impossible not to see behind the CFA franc one of the many faces of the still cumbersome presence of the colonizing power in the life of the countries it once colonized.
