CFA Franc

Recent developments in the cryptocurrency space have brought the 1942 Churchill words to the fore. Is this the beginning of the end of traditional currency? Or the end of the beginning of digital currency? In April 2021, the Central African Republic (CAR) signed a law adopting bitcoin as an official local currency, alongside the CFA franc. This was part of the country’s broad-based plans to solve exchange rate challenges and integrate cryptocurrencies into its financial system. The signing made the CAR the first African country and the second in the world after El Salvador (which took a similar step on September 7, 2021) to adopt bitcoin as a legal tender. However, CAR’s bitcoin experiment was a controversial move and sparked a backlash from regional and international financial organizations like the Bank of Central African States (BEAC) and the International Monetary Fund (IMF). However, the CAR’s Presidency believes that the move will “open up new opportunities” for the country. In this paper, I examine some of the political and economic implications of the “Bitcoin” experiment in CAR by answering two questions: is the adoption economically viable? Or is it an attempt to undermine the French-backed CFA franc and close ties with Russia?

Voilà bientôt trois ans que ce livre a été publié. Il a même été récemment traduit en italien et en anglais, preuve de l’actualité et de l’intérêt du sujet dont[1] la pertinence n’est plus à démontrer. Parce qu’il pose de manière claire et pédagogique les termes d’un débat fondamental jusque-là largement escamoté, le livre de F. Pigeaud et N. S. Sylla mérite d’être lu et relu. Nous insistons sur l’emploi du qualificatif « fondamental », car la zone franc constitue quasiment le dernier archétype d’un dispositif monétaire néocolonial : d’où le titre de l’ouvrage publié chez Pluto Press qui nous apparaît davantage correspondre à la démonstration de l’ouvrage: Africa’s last colonial Currency. The CFA Franc Story.

In “Africa’s Last Colonial Currency: The CFA Franc Story,” Fanny Pigeaud and Ndongo Samba Sylla highlight the monetary side of French neo-colonialism in Africa, while emphasizing that “There is nothing more ‘political’ than money.” Sylla and Pigeaud provide an overview of the history of the CFA franc, its colonial origins, how it operates both technically and politically, and proposals for more democratic and development-oriented alternatives. They do so in a clear and accessible way that explains basic concepts like foreign exchange rate markets and regimes. This book both reflects and contributes to the growing opposition to the CFA franc. The CFA’s functioning is obscure even in France and the CFA zone member countries; therefore, this newly translated edition is valuable and timely. It helps expand the number of Africans that can meaningfully participate in these crucial debates about the future course of the continent’s development.

In reading Pigeaud and Sylla’s Africa’s Last Colonial Currency: The CFA Franc Story I could not help but think of the word doublespeak which refers to a kind of “language used to deceive usually through concealment or misrepresentation of truth.” Deployed by the American linguistic scholar William Lutz and others doublethink is the kind of manipulation of language and thought, so eloquently deployed by George Orwell in his dystopian novel1984, as a way of maintaining political control. As Orwell argued in his essay “Politics and the English Language” political language and the exercise of power consist “largely of euphemism, question-begging and sheer cloudy vagueness,” while providing “largely the defence of the indefensible.” Orwell’s insight is very applicable to the ways in which political control undergirds economic arrangements as Pigeaud and Sylla’s book discusses.

In our book, we tried to explain the circumstances in which this politico-monetary arrangement was created, how it works, what changes it has undergone, what purposes it serves, what benefits France derives from it, and how it handicaps the development of African countries that use it. While tracing the long history of repression against African political leaders and intellectuals who strove for the monetary liberation of French-speaking Africa, we have not forgotten to mention the recent movements on the continent and in its diaspora that are calling for the end of the CFA franc. Faced with the criticism that the opponents of the CFA franc have no serious alternative to propose, we show that African economists such as the Franco-Egyptian Samir Amin, the Senegalese Mamadou Diarra and the Cameroonian Joseph Tchundjang Pouemi, among others, had outlined different options for leaving this colonial device from the end of the 1960s, that is to say, well before the formulation from 1983 of a single currency project for West Africa.

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

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.