By Kako Nubukpo, former Togolese Minister of Forecasting and Evaluation of Public Policies.
Italy has obviously never fully recovered from its defeat at the Battle of Adoua against Ethiopia, which partly sold the end of its colonial adventure in Africa and certainly marked its decline on the international scene. It has nonetheless retained a strong grudge and a longing for France and Great Britain, which in this case have had more prosperous destinies. The proof was given to us these last days, marked by the heavy fire of statements of Luigi di Maio and Matteo Salvani, both vice-presidents of the Italian Council, who in turn denounced the perpetuation of the French colonization in Africa, with the support of their demonstration, the question of the CFA Franc.
The CFA Franc is a problematic currency: colonial and post-colonial heritage, its compatibility with the process of emergence of the 14 African economies that use it, is a real economic question. Its persistence, almost 80 years after its creation on December 26, 1945, refers to the sensitive question of the political sovereignty of African states. The social movements that it has been triggering for some years among African youths and diasporas are undoubtedly the question of the demand for emancipation of young people, caught between the massive unemployment of which they are the first victims and the lack of space for political and societal expression.
On the first point, the economy of the CFA Franc remained that of the colonial subjection: it is a currency which maintains the primary insertion of the economies of the Franc zone in the international trade, insofar as its use does not has not allowed to begin the on-site processing of raw materials and even less trade between economies of the Franc zone. It also undermines the export price competitiveness of the economies that use it. Finally, it encourages double financial and monetary repression, because of the primacy of the defense of its fixed parity with the Euro to the detriment of the financing of the economies of the Franc zone. These economies have a vital need for low-interest financing, income-generating and employment-generating activities for their populations, which doubles every quarter century.
On the question of political sovereignty, it seems strange that the central banks independent of their respective states in the Franc zone that are BCEAO (West Africa) and BEAC (Central Africa) are not trying to establish cooperation direct with their sister Frankfort, the European Central Bank (ECB), just as independent and above all issuer of the Euro, to which the CFA Franc is attached. On the contrary, the central banks of the Franc zone pass through the French Treasury – hence the Ministry of Finance of a Member State of the Eurozone – to obtain the guarantee of the fixed parity between the CFA Franc and the Euro, in counterpart of the deposit with the French Public Treasury, of at least 50% of the foreign exchange reserves of the Franc zone. This deposit feeds all sorts of fantasies relating to the exploitation by Paris of African States, breach in which the two vice-presidents of the Italian Council had the good luck to rush. In fact, this deposit is remunerated (at the rate of the marginal facility of the ECB) and its amount (roughly 15 billion Euro) represents only 0.5% of the French public debt. It may also be difficult to do otherwise because the gross domestic product (GDP) of the entire Franc zone represents only 7% of French GDP, for a population two and a half times larger.
In addition, the manufacture of CFA banknotes and coins remains, more than half a century after independence, the monopoly of France and the factories of the Banque de France. Beyond the mere technical subcontracting relationship regularly claimed by the central bankers of the Franc zone, it is difficult not to read in the inertia of this contractual arrangement, a subcontracting of the monetary sovereignty of the Member States. the Franc zone.
It is also on this last point that the social movements anti F CFA regularly support to denounce the stranglehold of France on African states formerly colonized. These movements can be grouped into two categories: the first, from the African diaspora in France, are clearly in a claim of pan-African sovereignty transcending the specific situations in each of the states of the Franc zone. Their demands are all the more paradoxical because the members of these movements do not use the CFA Franc daily in their transactions, but rather the Euro. Their claims may reflect an identity misunderstanding and a willingness to settle accounts for a past that does not pass: colonization at the origin of the first migratory flows. The second movements, settled on the African continent, are closely linked to the struggle for the democratization of African political regimes (Y-in-a-horse, the broom citizen, etc.). Their critique of the CFA Franc is directly related to the poor economic governance of African leaders. Their criticism is often more moderate, due to the fear of the lack of a credible alternative to the CFA Franc.
We are here at the heart of the debate: the CFA Franc appears as a concession made by the States of the Franc zone in Paris, because of the perceived or real incapacity of the leaders of this zone to control a common currency. More serious, its perpetuation can also be seen as a voluntary servitude of African leaders found in the characteristics of this institutional arrangement (fixity of the parity, total guarantee of the convertibility between Franc CFA and Euro, free movement of capital between the zones Franc and Euro), a convenient way of not being proactive in the monetary governance of their states, and a vehicle for accumulating wealth outside the African continent.
In return, through this “monetary paternalism”, France would gain prestige, an illustration to the face of the world of the maintenance of the empire, a square in which its influence and influence would remain intact, at a time when competition from emerging countries (China, India, Russia, Brazil) is stronger than ever. Let us not forget the stability offered by this zone to companies in the Euro zone and the repatriation facilities for the benefits allowed by the very operation of the zone.
The Franc Zone and the CFA Franc deserve serious dusting, given the demographic dynamics of Africa, which makes it more urgent than ever to create massive jobs on the continent. In addition, the perpetuation of the mining predation model that they encourage, because of the imperative for the States to extract and export raw materials providing foreign exchange reserves to ensure the fixed parity between the CFA Franc and the Euro, generates a major ecological challenge in the countries of the zone. Finally, the institutional arrangements that carry them downplay the symbolic aspects of money, of all money.
We are therefore far from the easy shortcuts made by the Italian leaders between the CFA Franc and African migrants trying to reach Europe. In addition, migrants are not all from the franc zone, this is a shortcut that obscures the stakes of the debate. The French demographer François Hérand has already had many occasions to highlight the inanity of the millenarian speech of the political scientist Stephen Smith who titled in subtitle of his book “the rush to Europe”, ” the young Africa to the assault of old Europe “.
However, we must recognize that the promoters of the “circle of reason”, researchers and “reformers” in Africa as in France, have for many years stumbled on the wall of silence of African and French leaders on the CFA franc issue. . Faced with the denial of a real problem, the Italian populists have good luck to take the boulevard that was opened to them, generating in return protests as sharp as impotent French authorities. Italy, the third economy in the Euro zone, is co-owner of the Euro and therefore fully legitimate to join the debate on a currency that is attached to the Euro. We can only regret the way we enter this debate. However, the Africans would be naive to think that they will find in Italy the Lombard League and the Five Stars movement, ardent defenders of African prosperity. Africa is here just exploited in the latent media dispute between Italy and France around the issue of migrants and the proper application of the Dublin agreements.
An African proverb says, “When two elephants fight, it’s the grass that suffers.” Let’s hope Africa grass will not suffer too much, with or without CFA Francs.
Kapital Afrik intends to deliver strategic financial information to executives and managers, through a daily newsletter and a website that covers all African finance.