French monetary neo-colonialism: the CFA franc

Abstract

The CFA franc - which originally meant "franc of the French colonies of Africa" - was born in 1945, when it became the official currency of the French colonies in Africa, which until then had used the French franc. The CFA franc, in fact, was issued and controlled by the French Ministry of Finance: France could thus decide the external value of the currency - its exchange rate against the French franc - according to its needs. And it immediately proved it, by imposing on the colonies a highly overrated exchange rate. Today France is the only former colonial power that maintains its monetary zone in Africa, called the franc zone. Indeed, 14 countries in sub-Saharan Africa still use the CFA franc (now pegged to the euro since 1 January 1999). This currency is still today subject to the more or less explicit and more or less disinterested protection - depending on the side of the debate that has been chosen to believe - of France. Considering that from my point of view this monetary system is a full-fledged form of neo-colonialism, this thesis article aims to point out the interests of France to remain at the head of this monetary system, by examining not only the advantages granted to the Elysée, but also the benefits that African leaders derive from it. Indeed, one might wonder why the Member States of the franc zone are not abandoning the CFA system which is so damaging to them. Of course, if this system still exists, it not only provides benefits to France, which, in any case, has no qualms about using all the means of pressure at its disposal against those countries which question the CFA system, but also to other actors: the African elites. After all, many African leaders came to power with the support of the French government. The thesis begins by sketching out the colonial origins of the CFA franc before moving on to scrutinize the functioning of the CFA mechanism. I will then analyse the benefits and obstacles created by this system, and how circumstances have changed due to two major events that have marked the history of the CFA franc: the devaluation of 1994 and the transaction from the French franc to the euro. After mentioning certain heads of state who have rebelled against this currency, I will conclude by focusing on the Pan-African movement and on a possible end of the CFA franc with the creation of the ECO.