The CFA franc, which has been in circulation for 77 years, is an evil for African countries, Senegalese researcher Demba Moussa Dembele says.
However, there are several reasons why West African countries cannot free themselves from its tutelage in favor of a new single currency for West African states. Colonies that use it are among the poorest in the world.
On December 26, 1945, the Official Journal of the French Republic published a decree ratifying the CFA franc, signed one day earlier by Charles de Gaulle and the Ministers of Finance and the Colonies at the time.
Another important factor to remain using the French currency is the domination of French companies and banks in the economies of countries where the CFA franc is in circulation.
In Senegal, Ivory Coast, Niger, Togo, and other countries, the key sectors are in the hands of French companies and virtually all the banks are subsidiaries of French banks.
The free movement of capital between these countries and France allows French companies to freely repatriate their profits, without exchange controls on the amounts or exchange risk.
From a political point of view, France maintains its tutelage over the economies of CFA countries, which allows it to benefit from the status of great colonial power in Europe and in the world.
Without this influence on African countries, France would probably have a lower status than Germany or Britain. In addition, France is doing everything it can to keep the CFA franc pegged to the euro.
This ensures the free movement of capital between the countries of the CFA franc zone and France, in the interest of French companies and the member countries of the euro zone.
Politically, France will continue to play the role of godfather of the CFA countries, thus maintaining its status on the geopolitical level.
Despite these negative aspects, the decades-old project of a single currency for the Economic Community of West African States (ECOWAS) is being blocked and stagnating.
This situation is due to differences in the size and level of development of the ECOWAS countries. Although the convergence criterion was copied from the Maastricht Model, there is instability in several countries due to civil wars or coups d’états.
Without political stability, it is impossible to implement major economic decisions.
On top of these objective problems, we must add a subjective political problem: the reluctance of the member countries of the West African Economic and Monetary Union (UEMOA) to abandon the CFA franc, Mr. Dembele summed up.
Sputnik / ABC Flash Point News 2022.