Analysis

As observed by the International Energy Agency’s most recent World Energy Outlook, the Covid-19 crisis has underlined the importance of a reliable, affordable and secure electricity supply that is able to accommodate sudden changes in behaviour and economic activity, while continuing to support vital services. The electricity sector will play a key role in supporting economic recovery, and an increasingly important long-term role in providing the energy that the world needs, as it evolves into a system with lower CO2 emissions and enhanced flexibility.

These recent procedural and substantive trends encompassed in the WAU conference demonstrate a renewed and welcomed interest for arbitration of mega disputes in the African continent and the MENA region, both international arbitration hubs that are gaining prominence. Whilst challenges remain, biases against arbitrating disputes in these regions are being debunked by the experience of Africa and MENA with dispute resolution, the advent of institutions and “arbitration friendly” jurisprudence.

The newfound freedom of speech vis-à-vis currency in the African franc zone, following the announcement on 21st December 2019 in Abidjan (Côte d’Ivoire) of the imminent end of the CFA franc and its replacement by the Eco, brings to mind the “resurgence of repressed instincts” in psychoanalysis, in other words it is giving rise to every possible or imaginable excess, especially from the “25th hour” combatants, who are only now discovering that the CFA franc is not compatible with the emergence of French-speaking Africa.

Here are some thoughts around these developments which could have both positive and negative implications for the region moving forward. West African leaders should consider these as they make their decisions about which approach to adopt.

L’Afrique de l’Ouest est composée de 16 pays divisés en ex-colonies britanniques, françaises et portugaises. Dans le cadre des efforts d’intégration économique, ces pays fondèrent en juillet 1978, la Communauté des Etats de l’Afrique de l’Ouest (CEDEAO). Depuis cette date, il y a eu des progrès pour intégrer ces différents pays, tant au niveau des échanges économiques qu’au niveau des systèmes de paiements. C’est dans ce dernier domaine que la CEDEAO peine toujours à trouver une solution consensuelle pour adopter une monnaie commune ou unique. Depuis le milieu des années 1980, le chantier de la monnaie unique a été lancé mais il reste confronté à plusieurs obstacles d’ordre monétaire et politique, comme on le verra plus loin. Il y a actuellement huit (8) monnaies en circulation dans la CEDEAO, dont le franc CFA hérité de la colonisation française et sept (7) monnaies nationales

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It is difficult in just a few lines to deal with a subject as complex as the monetary cooperation agreement that is supposed to govern the transition from the CFA franc to the ECO. The “franc zone” in Africa comprises two types of CFA Franc, each with a specific denomination: that of the countries of West Africa and that of Central Africa, to which is added the franc of the Union of the Comoros. The focus here is on the West African zone.

Il est difficile en peu de pages d’aborder un sujet aussi complexe que l’accord de coopération monétaire censé entériner le passage du Franc CFA à l’ECO[2]. Entendons-nous bien. La « zone franc » en Afrique comprend deux types de Franc CFA ayant chacun une dénomination spécifique : celui des pays de l’Afrique de l’Ouest et celui de l’Afrique centrale [3]; à quoi s’ajoute le franc de l’Union des Comores. Le propos porte ici sur la zone Afrique de l’Ouest.

Un accord de coopération entre les pays membres de l’Union Monétaire Ouest Africaine et la France en date du 21 décembre 2019 (l’« Accord de 2019 ») annonce la fin du franc CFA. Qu’en est-il?

On 21 December 2019, the French President Emmanuel Macron and the Ivoirian President Alassane Ouattara announced a “reform” of the monetary cooperation relations between France and the West African Economic and Monetary Union (UEMOA). This reform comes with a transformation of the CFA Franc and takes place in the context of a single currency project of the Economic Community of West African States (ECOWAS). The CFA Franc zone currently comprises of 14 sub-Saharan African countries belonging to two currency unions. [1] Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo are members of the West African Economic and Monetary Union (UEMOA),[2] established in 1994 on the foundations of the West African Monetary Union, itself created in 1973. The other six countries - Cameroon, the Central African Republic, the Republic of the Congo, Gabon, Equatorial Guinea and Chad - are members of the Economic and Monetary Community of Central Africa (CEMAC). These two unions use the same currency, the CFA Franc, which stands for Communauté Financière Africaine (“African Financial Community”) in UEMOA and Coopération financière en Afrique centrale (“Financial Cooperation in Central Africa”) in CEMAC. Apart from Equatorial Guinea (Spanish) and Guinea Bissau (Portuguese), the other 12 countries have been French colonies (de facto or de jure).[3] The CFA Franc is issued by the Central Bank of West African States (BCEAO) (for West Africa) and the Bank of Central African States (BEAC) (for Central Africa). Each of these currencies is legal tender only within its own region, thus not directly interchangeable.