As West Africa Withdraws its CFA Reserves, Will France Retaliate?
Benin President, Patrice Talon, has announced that West African nations will withdraw their foreign reserves of the CFA franc from France.
“We unanimously agree on this, to end this model,” he said. “The central banks of African countries of WAMU (West African Monetary Union) will manage all of these foreign currency reserves and will distribute them to the various central bank’s partners in the world.”
Countries under WAMU include Benin, Senegal, Ivory Coast, Togo, Niger, Burkina Faso, Mali and Guinea-Bissau.
The Central African CFA, whose central bank is the Bank of Central African States (BEAC), will not be affected by this move. It includes the Congo Republic, Gabon, Chad, Equatorial Guinea, Cameroon and Central African Republic.
Africa has kept its West African and Central African CFA reserves in France since 1945. Following World War Two, the CFA was pegged to the French francs and, later, to the Euro.
At the time of creation, the CFA franc made its first declaration of parity to the International Monetary Fund (IMF). Its name stood for “Franc of the French Colonies of Africa”. During the 1960s, after the independence of African nations, the CFA came to mean ‘Communauté Financière Africaine ‘ (African Financial Community), but the independence of the continent would not be reflected in the CFA name.
In 2012, African Business magazine pointed out the CFA as a symbol of “lingering neocolonialism”. It asked, “whether the degree of autonomy achieved since 1960 is sufficient to be truly independent”? At the time, the CFA was still guaranteed by the French treasury.
Today, the CFA franc is completely dependent on Europe’s financial rule. It must follow the same monetary policies set by the European Central Bank. 65% of its external reserves are held in the Operations Account in Paris. Similarly, converting the CFA franc to the euro is only guaranteed by the French Treasury.
“In a show of her generosity and selflessness, metropolitan France, wishing not to impose on her faraway daughters the consequences of her poverty, is setting different exchange rates for their currency,” French Finance Minister, René Pleven, would say about the creation of the CFA.
In Africa, the CFA is a symbol of neocolonial dependence. In France (and Europe) it is a symbol of Western generosity to former colonies who, in centuries past, needed to be “saved” by European colonisation.
African no longer wants to be “saved”. That it needed to be saved in the first place is questionable. France’s “generosity” would come at a great cost, when, following Africa’s independence, the IMF began lending the continent loans with great interest rates attached. This action alone would send Africa plunging into poverty a state in which it is still trying to escape today. It was also the West’s intervention that would kill the Pan African movement of the 1960s, as newly-independent African nations tried to collectivise to strengthen the continent.
The decision to withdraw the West African CFA from France follows Africa’s attempt to unionise, to “transform Africa into the global powerhouse of the future”.
“Agenda 2063” is the new Pan African dream: “The Africa We Want”, its slogan reads. It is a “concrete manifestation of the pan-African drive for unity, self-determination, freedom, progress and collective prosperity pursued under Pan-Africanism and African Renaissance”.
“The current [CFA] model is more of a phycological problem than a technical,” Benin President, Patrice Talon continued.
“I can’t give you the date, but the willingness of everyone is already there,” Talon said, responding to French Finance Minister Bruno Le Maire’s openness to a reform of the currency. “Psychologically, with regards to the vision of sovereignty and managing your own money, it’s not good that this model continues. ”
Last month, Bruno Le Maire said: “What I can tell you is that the President of the Republic is ready for an ambitious reform of the franc zone. But I repeat: it is up to the member states of the franc zone to take the initiative, make proposals and measure how far they wish to go.“
Outward willingness to a cause does not necessarily equate inward intent. In the last few centuries of Africa’s history, up until the present, the continent’s advancement has continuously been derailed by positive promises from more advanced nations: promises which belie neocolonial intent.
In recent years – taking examples from the IMF – China has trapped Africa in debt that the continent cannot afford to pay back. (Africa may be forced to sell off its land and resources to Chinese ownership, creating a new neo-colonial servitude to China.)
Africa must learn from the blind spots of the Pan African leaders of the 1960s. Neocolonial powers will simply not give up their financial chokehold on a nation enriched with natural resources and mass population power. With complete financial freedom, Agenda 2063 would otherwise be easily realised. To take back financial control of Africa, the West may begin to spearhead more political turmoil for the continent.