Loomnie

From a WSJ review of Stealth of Nations: The Global Rise of the Informal Economy:

Mr. Neuwirth introduces us to a woman named Jandira who for a decade has peddled coffee and homemade cakes to the unlicensed vendors at São Paulo’s early-morning wholesale market for pirated movies. Her street-corner business, she proudly tells him, has enabled her to buy two cars and a house and to pay her children’s fees at private school. Another of Mr. Neuwirth’s sources, Chinese handbag designer Ethan Zhang, prefers to stay illegal. For him it’s a matter of costs and benefits: “If I want to get a license, then I will need a bank account and an office in an office building.” These are not people who lack the skills to survive through legal employment; they just see no good reason to join the legal economy.

System D is full of surprises. From Linda Chen, who trades counterfeit auto parts, we learn that China has a hierarchy of fake merchandise: The manufacturers of high-quality fakes offer guarantees and take back defective products, but with low-quality fakes it’s caveat emptor. Ogun Dairo buys woodchips from a sawmill and uses them to smoke fish, for sale by street vendors; her unlicensed grill is in an illegal squatter settlement in Lagos, but she buys fish that have been imported from Europe. At the euphemistically named Guangzhou Dashatou Second Hand Trade Center, where Arthur Okafor obtains the pirated mobile phones that he later smuggles into Nigeria, the cash turnover is so high that almost every (unlicensed) kiosk has a battery-powered currency counter.

The review reminds me of a chapter in my dissertation, in which I follow a container of secondhand clothing from the Cotonou port to the used clothes market in the Beninese city, and from the market to the Seme border and then into Nigeria. I show the different regulatory regimes under which batches of the imported used clothing fall – when taxes get paid on them and when not, and how the final retailer in Lagos sometimes actually pay some form of tax on the goods he has in his small stall on Lagos Island – even when secondhand clothing is not legally supposed to be imported or sold in the country (there is a ban on the importation of secondhand clothing into Nigeria). It also reminds me of the importance of ethnography for understanding microeconomic interactions that eventually feed into macroeconomic figures of a country. (Try understanding why Benin would always have a balance of trade deficit without knowing that almost all consumer goods it imports ends up being smuggled into Nigeria.) Of course, the whole idea of the informal economy itself arose from Keith Hart’s ethnographic study of urban slums in Ghana in the 1960s.

Read the review here. H/T to Bunmi Oloruntoba on Twitter.

As donations, pieces of clothing bear imprints of the aspirations of their donors, and as purchased commodities, they are invested with the desires of their consumers. This article describes a particular configuration of the international trade in secondhand clothing. The trade links Western homes with West Africans families in an intricate web; its history also shows a relationship between West Africans who claim to be of Jewish descent and Jewish secondhand clothing merchants.

“The Jews of Africa”
One of the most remarkable things about the West African secondhand clothing trade is that it is controlled, almost in its entirety, by Igbo traders. The Igbo are a Nigerian ethnic group whose members sometimes claim to be of Jewish descent. There is probably no better person to guide one through this tradition of Igbo origin than one of the most prolific and respected Igbo historians, Adiele Afigbo, who writes[i]:

‘The claim to Hebrew origin is the one of which we have the earliest mention, and that in the autobiography of Olaudah Equiano, an Igbo ex-slave who wrote in 1789. Early in this century [twentieth century] the Rev. G.T. Basden saw a very close resemblance between Igbo culture and Jewish culture without quite saying the Igbo were of Jewish descent. But such was his form of words that the hasty would draw that conclusion. Then later, probably in the 1950s, one Ike Akwelumo asserted in his pamphlet The Origin of the Ibos that the Igbo were a branch of the Jews. According to him the name “Ibo,” used for the people during the colonial period, was a contraction of the word “Hebrew.” At some intermediate stage, he says, the word had been contracted to Heebo.’

Although not many Igbo historians take this too seriously – Adiele Afigbo himself seriously contests this story – it sometimes comes up in daily conversations. For instance, it is not uncommon for one to hear, during a normal conversation with everyday Igbo people, that they are the Jews of Africa because they are very famous as migrants, and because they are successful businessmen. This is particularly interesting in the case of secondhand clothing because the trade combines migration with business success; and their first regular suppliers were Jewish merchants.

Jews and secondhand clothing
In many parts of Europe, from the late Middle Ages, the trade in secondhand clothing was one of the very few economic activities in which Jews were engaged. This was primarily because then, trade and craft were tightly regulated by guilds, and owing to pervasive religious prejudice against Jews, they were excluded from guild membership. Only few marginal commercial activities were open to them. One of them was pawnbroking; the other was the trade in secondhand goods (including clothing)[ii].

In England, between the seventeenth and early nineteenth century, the trade was known as a Jewish trade. In the mornings, Jewish clothes traders would walk through the streets of middle-class and aristocratic areas of London, shouting “Old Clothes”, to attract the attention of servants who had their masters’ cast-offs to sell. After a successful morning, they would go back to a part of the city called Rag Fair, where they would sell to other Jewish secondhand clothing dealers who would repair the garments for resale in their shops. Some contemporary writers claim that in the mid-eighteenth century, there were as many as two thousand Jewish Old Clothes men in London alone[iii].

In the nineteenth century New York, immigrant Jews of Eastern European origin would walk through the streets shouting “Rags, Bones, Bottles![iv]” Some of them later introduced the trade to other parts of the United States. By the twentieth century, second generation migrants still operated some of the family businesses that were founded then. Some of these were the first regular suppliers of secondhand clothing to Igbo importers in West Africa.

The Igbo and secondhand clothing
The Igbo first became involved in the secondhand clothing trade in the 1940s, when they bought Army surplus stock during and after the Second World War. The clothing was obtained from ships that were berthed in Port Harcourt, part of the now infamous Niger Delta region. By the 1950s, many of the traders started importing secondhand clothing directly from the New York-based Jewish merchants. They would get unsorted, bundled, shipments of secondhand clothing – the finesse that now characterizes the packaging was to come later. From the importers, fellow Igbo retailers would buy collections of secondhand clothing, which they would retail in other parts of Nigeria. Later, in the early 1960s, Igbo traders started re-exporting secondhand clothing from Nigeria to other parts of West Africa. Destination countries included Benin, Togo, Ghana and Cameroon.

Today, the main secondhand clothing markets in Cotonou and Lome, the capitals of Benin Republic and Togo respectively, are dominated and controlled by Igbo traders. Some of them are importers, who have established and maintained trading connections with European and American secondhand clothing firms; others are retailers, who sell bales of secondhand clothing to other Igbo traders who would then retail pieces of secondhand clothing.  In the case of Benin Republic, which borders Nigeria, most of their customers cross the border from Nigeria into Benin. Since the 1970s, the importation of secondhand clothing has been banned in Nigeria. Therefore, almost all the pieces of secondhand clothing one would find in Nigeria is smuggled from Benin.

Western cast-offs meet West African desires
A normal day of cloth shopping for many Lagos families involves a trip to the Yaba market, one of the numerous secondhand clothing markets in the city. Stalls made of wood and corrugated iron sheets house rows and bundles of secondhand clothing. Many of the items of clothing are carefully laundered and hung on racks; others are piled on the floor of the stalls. In front of the stalls stand young men and women, with pieces of secondhand clothing hangers in hand, calling on potential customers to come and patronize their wares. Nearby, in another section of the market, there are stalls where rucksacks, small purses and all sorts of bags are sold. In still another section, shoes of varying life stages are either paired up in neat rows or are stacked together. Like the clothing, the ones that are neatly set in rows are usually of better quality than the ones in stacks. In many cases, they are designer labels: this market is one place where one can pick up a Hugo Boss shirt – ‘original’, as one is often reminded by the vendors – for less than a fraction of what it would cost in a shop in a European city. But more often than not, they are simply imported Western cast-offs.

In most cases, the pieces of clothing found in the market in Lagos start their journey in the homes of European and American families. In Germany, items of clothing that are no longer wanted by their owners are packed into bags that are then deposited into roadside boxes. From there, they are taken to warehouses where they will be cleaned and sorted. Some of them are sold in the secondhand clothing shops that dot the streets of many German cities; but a large percentage are baled and exported to developing countries.

In Britain, the competition for its trade is fierce. Quite a number of charity organizations make a lot of their running cost from donations of secondhand clothing. Some rely on walk-ins – whereby donors of secondhand clothing take their pieces of clothing into a charity store. Needless to say, not all of the clothing that is taken into a charity shop is sold there. A large percentage end up being sold off to those who are described in the textile recycling industry as “commercial textile recyclers”. These are commercial organizations that collect, sort, bale and export secondhand clothing.

Some charities actually give franchise to “charity fundraisers”. These organizations collect secondhand clothing on behalf of charities, and pay the charities a certain percentage of the value of the collection. The most sophisticated charities make collections by themselves and have their own sorting and exporting firms. They sell some of their collections – usually a relatively small quantity – in their shops. The rest is sent to their processing factories, where the pieces of clothing are packed together and baled for exportation. Commercial textile recyclers, who buy clothing that charities that do not have their own sorting firms cannot sell in their shops, also make collections at areas where English municipalities designate as recycling areas. Bales of secondhand clothing are exported to East European, South Asian and African countries.

The international trade in secondhand clothing connects Western families with their counterparts in developing countries in an intricate web of desire and aspiration. Most of the time, on the part of the Westerner, this takes the form of the desire to help people who are less fortunate. Some assume that these less fortunate people are poor people in the country of the donors. Others assume that the less fortunate people are citizens in the developing world. Most people do not know that there is an active international trade in secondhand clothing. In my view, this is a more sustainable and fruitful relationship than one of pure donation, where the consumers simple receive the clothing for free.

As it is at the moment, there is a wide network of traders that is built around donated secondhand clothing. This network includes different actors, ranging from family-owned commercial textile recycling firms to small secondhand clothing importing companies, and extending to individually-owned secondhand clothing stalls. The industry provides a livelihood for them, one that would not exist if the clothing were given for free. Besides, it is definitely more dignified to purchase what one needs than to receive it as handout.

The clothing also satisfies the clothing desires of consumers. The reasons for this are not limited to affordability. To be sure, there are a lot of people who consume secondhand clothing because they cannot afford to buy new clothing. There are however others who go to shop for secondhand clothing because they believe that this is where they can find ‘original’ designers label. In a country like Nigeria, where most of the ready-made clothing is imported from China, a lot of what is available in the market are cheap Chinese knock-offs. Many people therefore prefer to buy designer labels from secondhand clothing shops because they can be sure that what they obtain there are original and good quality clothing. One could call them slaves of fashion, in search of authenticity – much like Americans and Europeans who go to secondhand clothing stores to buy vintage clothing.

[ii] Werner J. Cahnman, ‘Socio-Economic Causes of Antisemitism’, Social Problems, 5 (1957), 21-29.

[iii] Todd M. Endelman, The Jews of Georgian England, 1714-1830: Tradition and Change in a Liberal Society (University of Michigan Press, 1999).

[iv] Hanna Rose Shell and Vanessa Bertozzi, Secondhand (Pepe) Documentary, 2007.

This article was originally written for the journal of the Jewish Museum in Berlin

Off to Basel tomorrow for an African Borderlands Research Network conference. As part of a panel on a comparative study of cross-border trade networks in Africa, I will be presenting a paper titled “Benin-Nigeria secondhand clothing cross-border trade in historical perspective”. The abstract:

Today, Benin Republic is the main supplier of secondhand clothing to Nigeria, a country in which the importation of secondhand clothing is banned. Igbo traders, who form a transnational trade network that spans the eastern part of the West African coast and that extends to Europe and North America, dominate the import and retail trade in the commodity in Benin Republic. This is a network that could be described – depending on the side from which one chooses to look at it – either as an agent of development or as a predator on the state’s resources. The exercise here is to move beyond those arguments and to show the current configurations of the trade network as it has responded to a changing global political and economic landscape, and as it has been modified by the changes in the political economy of the West African countries that it spans.

For more on the conference [pdf].

1. On the Islamic origins of the World Trade Centre architecture

2. What percentage of salary increase would satisfy Indian lawmakers? (This is not a tip for Nigerian lawmakers.)

3. On the importance of field research for development economics (Almost there, economists, almost there.)

4. What about the foreskin? (On male circumcision.)

5. A Beninese Ponzi scheme that may cost a presidency

Just learnt of him through NPR’s A Blog Supreme. A short bio:

Loueke was born in Benin, studied music in the Ivory Coast as a teenager, did further jazz-specific training in Paris for five years and finally ended up with a Berklee scholarship. In Boston, he met his trio: Swedish bassist Massimo Biolcati, who has an Italian name, and drummer Ferenc Nemeth, who grew up in a small town in Hungary. On Mwaliko, he also collaborates with Angelique Kidjo — also from Benin — and the Congolese-born Richard Bona. Loueke uses his jazz skills, forged in the crucibles of conservatories, to revisit songs and ideas he learned back in Cotonou. Obversely, some of the unique techniques he practices — even on the album’s unabashedly “jazz” tunes — were inspired by sounds he remembers from his childhood.

Check out this video of a live performance with Herbie Hancock

In a group interview in September, 18 disgruntled truck drivers in Cotonou, Benin, vented their frustrations to two Trade Hub consultants: driving freely from Cotonou to Ouagadougou was impossible without harassment, they said. They sometimes spend three days at borders where customs officials hold up paper work when they refuse to pay bribes; meanwhile, their clients in importing countries wait impatiently to receive the goods.
At the borders and checkpoints where unofficial fees were demanded, they do not receive receipts to prove payment later to their clients. Like many other transport companies in the region, they bear costs and lose income due to unpredictable expenses on West African roads and borders.

“Even when you have all the paperwork, it is not always taken into account,” one said. “There is not a lot of documentation required really, but there are too many unnecessary delays.

“Laws are different from country to country and the fees are exceptionally high. There is really no free movement across West Africa.”

But in the agreements made between ECOWAS countries, that is not supposed to be so.

What is described in the article is the official side – which means that it concerns goods that would normally be allowed to enter into countries, either because they originate 100% from a country within the Community (mostly agricultural produce, livestock, etc) or because some form of value (officially, it should be at least 30% of the value of the product) is added in one of the countries.

Then there is the informal type. Nigeria, for instance, imposes bans on, well, almost everything that is of interest to someone of power in Nigeria. But that does not stop the importation of those things. Importers simply divert the trade to Benin and then smuggle them from Benin to Nigeria. Rice is a particular case in point. In 2007, for instance, a Nigerian newspaper reports that the total import duty on rice in Nigeria came to about 100%, while in Benin it was 38%. In the same year, it was estimated that about 2,000 tonnes of rice was re-exported (smuggled) from Benin into Nigeria per day. If you are a smart importer you simply divert your rice to Benin, pay the import duty – and those guys are pretty well organised so you WILL pay the duty - and then smuggle it into Nigeria. While I was researching these issues in Cotonou in 2008, someone mentioned that she could almost believe that the Beninese government bribes Nigeria to prohibit the importation of some goods into the country so that Benin can make some money off it.

The long and short of the story is: as long as there are these kinds of trade policy disparities within the region, regional integration is going to be something they periodically pay lip service to.

Back to the West Africa Trade Hub article:

“Making regional integration a reality requires harmonization of trade policies and practices to eliminate uncertainty for traders and customs officials at borders,” said Trade Hub Business Environment Advisor Lori Brock. “There is a price to pay when a region fails to come together following agreements, regardless of language or currency barriers.”

H/T to Osize

A news story on crossing from Benin to Nigeria, through the Seme border:

“At every half kilometre, you encounter checkpoints manned by all sorts of agencies. This is a real problem to the sub-region,” he said. “On a bad day, from the Seme border down to Lagos, you meet over 70 checkpoints and they all ask the same thing, ‘what do you have for us’. They are all unlawful.

Although the report mentions the list of prohibited items, it does not say that the real reason that the border is that policed is because of that list itself. I have written somewhere else that the Nigerian state should consider other measures apart from outright prohibition. As long as the list of prohibited items is long, that border, as well as the road that runs from the border to Lagos, is going to remain as policed – either legally or illegally – as it is at the current moment.

I spent most of last year travelling the road.

After 10 months in West Africa (Nigeria, Bénin, Togo), I am back in Germany. I did not have much time for blogging during the 10 months cos I was moving around a lot, cos I did not have very reliable internet connection, and cos my work did not allow me to spend so much time on the internet. Looking back at the blogging I did in the 10 months I sometimes ask myself how I even had the time to do it. So, I hope things will improve on the blogging end, and that my work in Deutschland will proceed well. Great thanks to Oz, Solomonsydelle, Waffarian, Nneoma, and every other person who checked on me, but whose names I cannot remember at the moment. I appreciate your care and concern.

And to the general blogging community, you will hear from me soon.

This is an article I first read on Nigeria Village Square, but later found out that it was originally from ocnus.net. I thought to post it here for comments. I am not an expert on CFA, but I am trying to learn as much as possible about it. So I’m waiting for your comments!

The Economic And Political Effects Of The CFA Zone
By Dr Gary K Busch

One of the most important influences in the economic and political life of African states which were formerly French colonies is the impact of a common currency; the Communuate Financiere de l’Afrique (‘CFA’) franc. There are actually two separate CFA francs in circulation. The first is that of the West African Economic and Monetary Union (WAEMU) which comprises eight West African countries (Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo. The second is that of the Central African Economic and Monetary Community (CEMAC) which comprises six Central African countries (Cameroon, Central African Republic, Chad, Congo-Brazzaville, Equatorial Guinea and Gabon), This division corresponds to the pre-colonial AOF (Afrique Occidentale Française) and the AEF (Afrique Équatoriale Française), with the exception that Guinea-Bissau was formerly Portuguese and Equatorial Guinea Spanish).

Each of these two groups issues its own CFA franc. The WAEMU CFA franc is issued by the BCEAO (Banque Centrale des Etats de l’Afrique de l’Ouest) and the CEMAC CFA franc is issued by the BEAC (Banque des Etats de l’Afrique Centrale). These currencies were originally both pegged at 100 CFA for each French franc but, after France joined the European Community’s Euro zone at a fixed rate of 6.65957 French francs to one Euro, the CFA rate to the Euro was fixed at CFA 665,957 to each Euro, maintaining the 100 to 1 ratio. It is important to note that it is the responsibility of the French Treasury to guarantee the convertibility of the CFA to the Euro.

The monetary policy governing such a diverse aggregation of countries is uncomplicated because it is, in fact, operated by the French Treasury, without reference to the central fiscal authorities of any of the WAEMU or the CEMAC. Under the terms of the agreement which set up these banks and the CFA the Central Bank of each African country is obliged to keep at least 65% of its foreign exchange reserves in an “operations account” held at the French Treasury, as well as another 20% to cover financial liabilities.

The CFA central banks also impose a cap on credit extended to each member country equivalent to 20% of that country’s public revenue in the preceding year. Even though the BEAC and the BCEAO have an overdraft facility with the French Treasury, the drawdowns on those overdraft facilities are subject to the consent of the French Treasury. The final say is that of the French Treasury which has invested the foreign reserves of the African countries in its own name on the Paris Bourse.

In short, more than 80% of the foreign reserves of these African countries are deposited in the “operations accounts” controlled by the French Treasury. The two CFA banks are African in name, but have no monetary policies of their own. The countries themselves do not know, nor are they told, how much of the pool of foreign reserves held by the French Treasury belongs to them as a group or individually. The earnings of the investment of these funds in the French Treasury pool are supposed to be added to the pool but no accounting is given to either the banks or the countries of the details of any such changes. The limited group of high officials in the French Treasury who have knowledge of the amounts in the “operations accounts”, where these funds are invested; whether there is a profit on these investments; are prohibited from disclosing any of this information to the CFA banks or the central banks of the African states.

This makes it impossible for African members to regulate their own monetary policies. The most inefficient and wasteful countries are able to use the foreign reserves of the more prudent countries without any meaningful intervention by the wealthier and more successful countries. The fact that as the French GDP grows and the parity of the Euro to the dollar (the main currency of international trade) appreciates there is the constant danger that the CFA franc may be fixed at too high an exchange rate. This dampens the growth in trade between Africa and the rest of the world and allows other countries, especially in Asia, to use their more flexible exchange rates to gain market share, supplanting the Africans.

The creation and maintenance of the French domination of the francophone African economies is the product of a long period of French colonialism and the learned dependence of the African states. For most of francophone Africa there is only limited power allowed to their central banks. These are economies whose vulnerability to an increasingly globalised economy is increasing daily. There can be no trade policy without reference to currency; there can be no investment without reference to reserves. The politicians and parties elected to promote growth, reform, changes in trade and fiscal policies are made irrelevant except with the consent of the French Treasury which rations their funds. There are many who object to the continuation of this system. President Abdoulaye Wade of Senegal has stated this very clearly “The African people’s money stacked in France must be returned to Africa in order to benefit the economies of the BCEAO member states. One cannot have billions and billions placed on foreign stock markets and at the same time say that one is poor, and then go beg for money.”

How Did This Happen?

This system of dependence is a direct result of the colonial policies of the French Government. In the immediate post-war period after the signing of the Bretton Woods Agreement in July 1944 the French economy urgently needed to recover. To assist in this process it set up the first CFA amongst its African colonies to guarantee a captive market for its goods. The principal decision which resulted from the Bretton Woods Agreement was the abandonment of the Gold Standard. In short, the new system gave a dominant place to the dollar. The other currencies saw their exchange rate indexed to the dollar. The reserves of the European central banks at that time consisted of currencies of dubious post-war value and gold which had been de-pegged from the fluctuations of the currency. For this reason France needed the currencies of its colonies to support its competitiveness with its American and British competitors. De Gaulle and his main economic advisor, Pierre Mendès France met with some African leaders and developed a Colonial Pact which would enshrine this is in a treaty (with both public and secret clauses). The genius behind this was Jacques Foccart, France’s “Mister Africa”.

Decolonization south of the Sahara did not happen as de Gaulle had intended. He had wanted a Franco-African Community that stopped short of total independence. But when Sekou Toure’s Guinea voted “no” in the 1958 referendum on that Community, the idea was effectively dead. Guinea was cast into outer darkness because of its decision and a Community of sorts came into existence, but the call of full independence proved too strong to resist.

Not really having planned for it, in 1960 de Gaulle had to improvise structures for a collection of small newly independent states, each with a flag, an anthem, and a seat at the UN, but often with precious little else. It was here that Foccart came to play an essential role, that of architect of the series of Cooperation accords with each new state in the sectors of finance and economy, culture and education, and the military. There were initially eleven countries involved: Mauritania, Senegal, Cote d’Ivoire, Dahomey (now Benin), Upper Volta (now Burkina Faso), Niger, Chad, Gabon, Central African Republic, Congo-Brazzaville, and Madagascar. Togo and Cameroon, former UN Trust Territories, were also co-opted into the club. So, too, later on, were Mall and the former Belgian territories (Ruanda-Urundi, now Rwanda and Burundi, and Congo-Kinshasa), some of the ex-Portuguese territories, and Comoros and Djibouti, which had also been under French rule for many years but became independent in the 1970s. The whole ensemble was put under a new Ministry of Cooperation, created in 1961, separate from the Ministry of Overseas Departments and Territories (known as the DOM-TOM) that had previously run them all.

The key to all this was the agreement signed between France and its newly-liberated African colonies which locked these colonies into the economic and military embrace of France. This Colonial Pact not only created the institution of the CFA franc, it created a legal mechanism under which France obtained a special place in the political and economic life of its colonies.

The Pacte Coloniale Agreement enshrined a special preference for France in the political, commercial and defence processes in the African countries. On defence it agreed two types of continuing contact. The first was the open agreement on military co-operation or Technical Military Aid (AMT) agreements, which weren’t legally binding, and could be suspended according to the circumstances. They covered education, training of servicemen and African security forces. The second type, secret and binding, were defense agreements supervised and implemented by the French Ministry of Defense, which served as a legal basis for French interventions. These agreements allowed France to have predeployed troops in Africa; in other words, French army units present permanently and by rotation in bases and military facilities in Africa; run entirely by the French.

According to Annex II of the Defence Agreement signed between the governments of the French Republic, the Republic of Ivory Coast, the Republic of Dahomey and the Republic of Niger on 24 April 1961, France has priority in the acquisition of those “raw materials classified as strategic.” In fact, according to article 2 of the agreement, “the French Republic regularly informs the Republic of Ivory Coast (and the other two) of the policy that it intends to follow concerning strategic raw materials and products, taking into account the general needs of defence, the evolution of resources and the situation of the world market.”

According to article 3, “the Republic of Ivory Coast (and the other two) inform the French Republic of the policy they intend to follow concerning strategic raw materials and products and the measures that they propose to take to implement this policy.” And to conclude, article 5: “Concerning these same products, the Republic of Ivory Coast (and the two others) for defence needs, reserve them in priority for sale to the French Republic, after having satisfied the needs of internal consumption, and they will import what they need in priority from it.” The reciprocity between the signatories was not a bargain between equals, but reflected the actual dominance of the colonial power that had, in the case of these countries, organised “independence” a few months previously (in August 1960).

In summary, the colonial pact maintained the French control over the economies of the African states; it took possession of their foreign currency reserves; it controlled the strategic raw materials of the country; it stationed troops in the country with the right of free passage; it demanded that all military equipment be acquired from France; it took over the training of the police and army; it required that French businesses be allowed to maintain monopoly enterprises in key areas (water, electricity, ports, transport, energy, etc.). France not only set limits on the imports of a range of items from outside the franc zone but also set minimum quantities of imports from France. These treaties are still in force and operational.

The creation of such a system was not the preserve of the French National Assembly or the result of any democratic process. It was the result of policies conducted by a small group of people in the President’s office, the ‘African Cell’, initially led by Foccart. For the past half-century, the secretive and powerful “African Cell” has overseen France’s strategic interests in Africa, holding sway over a wide swath of former French colonies. Acting as a general command, the Cell uses France’s military as a hammer to install leaders it deems friendly to French interests. In return, these countries give French industries first crack at their oil and other natural resources. Sidestepping traditional diplomatic channels, the Cell reports only to one person: the president. The Cell’s close ties to oil giant Elf Aquitaine, where top executives were jailed on corruption charges, was a source of embarrassment. And a former Cell chief has now been convicted of charges related to arms trafficking to Angola. These highly contentious policy issues never came before any of France’s democratically-elected bodies. African policy is the personal fiefdom of the President’s office.

This was true for De Gaulle, Mitterand, Giscard D’Estaing and Chirac. Sarkozy apparently has no contacts or ambitions in this field and has left Chirac’s Cell in place.

The Impact of the Colonial Pact

Some of the consequences for the Africa countries of the continuation of a policy of dependence are obvious – lack of competitive options; dependence on the French economy; dependence on the French military; and the open-door policy for French private enterprise. However, there are more subtle differences which arise.

The French companies in francophone Africa, by virtue of their protected monopolistic or oligarchic status, contribute a substantial share of the GDP of these countries. More importantly, however, they are often the single largest group of taxpayers. In many of these countries the French corporations pay over 50% of the national tax revenues collected. This gives them a unique status. Quite frequently the French say that without the French companies the economy of the African state will collapse. When coupled with the inability of the country to access its reserves it undoubtedly true. However, it doesn’t follow that private corporations from other countries, like the U.S. or China, would not contribute equally. This is one reason that the French are so concerned with allowing competition into the market place.

Another aspect of this is the inability of these francophone countries to collect taxes from its ordinary citizens. In a country like the Ivory Coast which has been divided for a number of years between the rebel North and the loyalist South, tax collections in the rebel regions have been impossible. The rebels have waxed fat on taxes and fees imposed on their captive populations and the sale of stolen goods from their regions. They do not want to disarm because it will have a deleterious economic effect on them, not just a political one.

The lack of a citizenry paying taxes breeds a gulf between the government and the citizens; mutual responsibility is missing in the equation. It is the job of the National Assembly to legislate for programs based on the supply of revenue to the state, but if there are insufficient revenues the National Assembly is frustrated in its role. If 80% of the funds go to France as part of the CFA franc project there is little left for the ministers and the National Assembly to allocate for social programs.

In many of the francophone countries, suffering under conditions of drought, lack of food; lack of health care; it is only French ‘aid’ to the national treasuries that sustains them. This ‘aid’ is often their own money which the French have shepherded for them.

There are many in Africa who have seen and understood the problem of the CFA franc and the Colonial Pact. Mamadou Koulibaly, the President of the National Assembly in the Ivory Coast has been an outspoken critic of the Colonial Pact and the dominance of the CFA franc. He has written an excellent book on the subject and gives speeches and interviews on the subject regularly. The problem is that very few people understand the fundamental iniquity of this French system; including many Africans.

If African nations are to achieve growth and participate fully in the opportunities of globalisation they must be freed from the fetters of this colonial albatross. In order to attract additional direct investment in the economies, as opposed to just portfolio investment this situation must be changed. In the words of President Koulibaly, “In Africa we do not need alms, our problem is not due to a lack of money. My conviction is that we must first of all clearly state our ownership rights over our own land and the resources in our soil which were taken away by the colonialists when they conquered our countries, and still be taken away through the Colonial Pact”.