[Edito] CFA Franc: a facelift cut to measure for France

On December 21, 2019, the French and Ivorian presidents, Emmanuel Macron and Alassane Ouattara, took all of Africa off course by declaring the death of the CFA franc. The latter was then considered by the French Head of State "as one of the vestiges of Françafrique". A year and a half later, Paris has decided to return 5 billion euros to the Central Bank of West African States (BCEAO). A first step in the process of abolishing the CFA franc, the countries of the UEMOA zone being obliged to centralize 50% of their reserves in the French public treasury. A trompe-l'oeil measure. Because as we can read in the guarantee agreement published by the French government, France intends to keep its role of "guarantor" and will continue to have control over the future single West African currency. The cord that connects France to its former colonies is therefore far from being cut, despite the announced death of the CFA.

Paris does not want to let go of its role as guarantor

The deletion of the term "CFA" was also initially planned for 2020. And the Eco only exists today in the minds of Emmanuel Macron and Alassane Ouattara. In addition to the name change, the reform seems to have come to a standstill: the parity fixed to the euro - since 1999, one euro has been exchanged for 655,95 CFA francs - and the unlimited and unconditional guarantee of convertibility by Paris are remained, and will remain, unchanged. Could France's announced withdrawal of foreign exchange reserves therefore only be an illusion? In any case, the guarantee agreement provides for France to be informed of financial transactions between the UEMOA zone and the outside, or even of changes in the management of foreign exchange reserves. France even arrogates to itself the right to continue to participate in the meetings of the BCEAO Board of Directors. The reform of the CFA therefore looks like a facelift, while the foundations, they will remain intact.

France has everything to gain from this reform

France actually has everything to gain from this reform. By taking control of all currency transactions, Paris will keep an eye on all the strategic financial information of the WAEMU countries. And the French disengagement will absolutely not prevent Paris from touching its share of the pie: indeed, if France has to make use of its guarantee, this one will be… invoiced to the UEMOA. Finally, for the African countries which would be delighted to free themselves from the French yoke, it is almost the opposite: when Paris will play its role of guarantor, the countries of the Eco zone will have to deposit 80% of all currency payments received. That is 30% more than for the CFA. And to top it off, France will continue to print the West African single currency. No wonder France is active in reforming the single currency in the UEMOA zone. It is also not surprising that several countries, such as Nigeria, are slamming the brakes.