More than a year after the commitment of France and its WAEMU partners to reform their monetary cooperation, several French senators wonder why Paris seems to want to decide on this reform alone.
In May 2020, France officially ratified the end of the CFA franc. Goodbye CFA, hello ECO. The French Minister of Foreign Affairs then explained to the Foreign Affairs Committee of the National Assembly that “France's role is evolving to become that of a strict financial guarantor of the area”. The spokesperson for the government at the time, Sibeth Ndiaye, added that "this symbolic end should be part of a renewal of the relationship between France and Africa and write a new page in our history". Symbolic. The word was out. Because for many observers, the transition from CFA to ECO is only a simple facelift of a practice worthy of Françafrique. What is it really ?
To fully understand the challenges of the West African single currency, we must first go back to the origins of the CFA franc, its operating mechanism… and its initial meaning. Because before being the franc of the financial community.
African, the CFA referred to the French Colonies of Africa. To be able to use the CFA franc, each country of the West African Economic and Monetary Union (UEMOA) must deposit half of its foreign exchange reserves into the French Treasury account. It is also in France that CFA franc banknotes are printed. A way for Paris to keep control over the monetary policy of the West African sub-region, the Banque de France paying every year the bond interest from their reserves to member countries of the CFA zone and France can unilaterally decide on the franc CFA.
The CFA franc, a brake on Africa's development
Some see the CFA franc as a kind of "colonial tax". It is in reality a deposit, but its system remains questionable nonetheless. For economist Kako Nubukpo, former Togolese Minister of Foresight, the CFA franc is a brake on the development of West Africa. “Money must be at the service of growth and development. For that, you need credits. However, the ratio of credit to the economy to GDP in the countries of the franc zone is 23% when it is over 100% in the euro zone, ”he explained to Le Monde in 2015. Before adding that he "Is almost impossible for our countries to catch up with emerging economies if the CFA franc remains pegged to the euro". And the former Togolese minister recalled that "the question of sovereignty which underlies this debate is more than legitimate".
Will the creation of the ECO therefore be a response to Africa's need to regain its monetary sovereignty? Not really, to believe some French senators, surprised that France decides unilaterally to reform monetary cooperation between Paris and several African countries. For Pascal Savoldelli, senator from Val-de-Marne, “the reform of the monetary system under discussion in the French Parliament primarily concerns (…) the WAMU countries and their 130 million inhabitants”. However, continued the parliamentarian in an intervention on January 28, "as during the negotiations concerning the CFA franc at the time of the changeover to the euro, the African countries were at no time truly associated".
The BCEAO, soon to be the sole manager of its foreign exchange reserves?
France would therefore reproduce the same errors as with the CFA franc? The Communist senator insists on this subject: “There is an urgent need in this area to change the paradigm in monetary matters. Indeed, the balance sheet of this colonial monetary instrument, then neocolonial is not brilliant, even if the CFA franc is not the only cause of this situation ”. What Kako Nubukpo tries to qualify. “We must first define the model of society we want to build. This would dispassionate the subject. What does it mean to bulge out the chest by pretending to have a new currency that we will be unable to manage? He asked five years ago.
Before coming back to the fact that, six decades after independence, "it is inconceivable that (...) the countries of the franc zone continue to have a currency physically manufactured in France, to have their foreign exchange reserves deposited with the Treasury. French public ”. At the start of 2020, the American rating agency Standard & Poor's indicated in a study that “WAEMU member states will no longer be required to keep half of their foreign exchange reserves in an operating account in the French Treasury. In other words, the regional central bank, the BCEAO, will be able to manage its foreign exchange reserves as it sees fit ”. And this is undoubtedly a first step towards the monetary decolonization of West Africa ...