Even the way he describes the CFA Franc creation is weird. Before the CFA, the colonies used the French Franc so creating a different currency to capture the colonies’ forex doesn’t make sense. In fact the CFA was created to shield the colonies from the French Franc devaluation.
Colonial market were captured through tarriffs, different taxation and other things, but not by the CFA.

Anyway, how’s Benin ?

Yea, I too feel that the writer was either simply lazy or wanted to make the point that France was holding its old colonies to ransom. Either way the article is suspect for the things it conveniently left unmentioned.

First of all, when discussing the impact of the CFA, intellectual honestly requires to mention the good effects as well as the bad ones.
The first advantage is quite obvious: none of those countries have ever experienced run-away inflation. And the Beninois and the Cameroonians looking at Nigeria, the Ivoreans looking at Ghana or the people in Congo-Brazzaville hearing stories from Angola and DRC may think that they’re not loosing out by trading monetary independence for monetary stability. I think it would be interesting that Mali quit the CFA zone in the early 60’s and re-joined it when it restored democracy.
The other advantage is regional integration. Even without the trade agreements in CEMAC and WAEMU, having a common currency helped them develloping cooperative policies. However this brings a set of problems that the writer hasn’t mentionned. In fact, it probably wasn’t mentionned because it contradicts the idea that the monetary policy is decided by french technocrats without African input. The devaluation in the early 90’s was actually supported by countries like Ivory Coast and Cameroon who seeked to make their products more competitive and to make local production cheaper. The issue is that CFA countries are different. For Gabon or Congo-Brazzaville who only export oil and import everything, it wasn’t pretty. It’s quite similar to France and Italy arguing that the strong Euro is only in Germany’s interests.

There are also a bunch of weird inexact statements in the article:

- what happened between the immediate post-war and De Gaulle’s Communauté ? Why does the writer imply that a currency was created in 1945 by a group of people who came to power in 1958 ?

- there was actually some African resistance to independence. Houphouet-Boigny openly defended “communauté” frame-work and fought even more than the french government for the establishment of the insitutions the writer calls “the colonial pact”.

- it’s weird to declare military pacts “secret” when they involve permanent french presence in the capitals and major cities of African countries. The bases were in the open and the only mystery is really France’s inconsistence in intervenning. They sometimes intervened against and for the same regime, they let some rebellions and coups succeed and stopped others, and there’s really no way to guess what their criteria has been. I’d bet the decisions are really made with heavy local input (from french resident and diplomats) and not based on a Paris-based grand planning policy.

- I don’t understand how Ivory Coast unability to collect taxes recently has anything to do with the CFA ! I mean did the Naira help Nigeria’s tax collection in the East during the Biafran war ? Did the Dollar help the Union tax collection in Confederate States during the war ? I mean, Ivory Coast has issues collecting taxes in part of their territory that the government doesn’t controll ! There’s nothing monetary about that. And Ivory Coast was better at tax collection than almost all African countries, totally sovereign ones included.

- The Françafrique policy is murkier than what’s described. The “African Cell”, the friendly African leaders and the French companies involved in the relevant countries hold each other hostage to a larger extend that the typical neocolonial narative acknowledges. Elf’s Angola scandal was really about Elf pushing the diplomats to do something for MPLA (after Unita benefitted from the removal of the Carter ban on arms sale) to mantain close ties. The more recent Elf scandal was about Elf officials being used in a kickback operation to make a weapon sale to Taiwan be accepted by french and chinese politicians. And the most problematic part was the money said french politicans and the Elf lobbyists cashed in the process. And Omar Bongo threatened to release enough dirt to make the 5th Republic (the republic, not the government) fall if anyone dared linking him to anything.

That said, the argument for monetary independence, or at least for the option to adjust exchange rates is strong. After all, it’s hard to see why rates defined by counter-cyclical policies in France helps CAR, Benin and Senegal. The Euro makes it even worse as now even France doesn’t have control over its exchange rates.

On the role of reserves, I think it’s more complicated than that. Theodoro Obiang was complaining a year ago about the low yield Equatorial Guinea was earning by deposing its newly earned foreign currency reserves at the Central African Bank. And he actually threatened to stop doing so if Equatorial Guinea didnt have a bigger voice in the Central Bank. (the country has been poor forever until oil revenues changed them into the biggest contributor of CEMAC). So I don’t know to what extend anyone could argue that the money sitting at the French Treasury could be spent on devellopment rather than invested better. That brings us back to the monetary stability thing. It is a good thing that those countries have to not touch 60% of their foreign currency reserves.

But yeah, bad article, trimming down the of anti-neocolonialism posturing, the dishonest and wrong arguments, the historical inexactitude and concentrating on the real issue would have been better.

Mike Harmon