A French colonial-era currency remains active across 12 francophone African countries to this day, stalling economic development in the region.
This relic of colonialism includes a range of economic policies that appear to enrich France while impoverishing and restricting a dozen African countries that were previously colonised by the French, according to TheCenterForAfrica.
The CFA franc is a currency pegged to the euro that is used throughout the region by 14 African countries. It was created by France in the late 1940s to serve as a legal tender in the European country’s then-African colonies, according to Mediapart.
While 12 former French colonies use the CFA franc, an additional two countries, Equatorial Guinea (former Spanish colony) and Guinea-Bissau (former Portuguese colony) have also opted in to use the currency.
Membership of the franc zone has stunted francophone Africa’s growth, with 11 of its 15 members considered to be least developed countries, according to the UN
Only Cote d’Ivoire, Cameroon, Congo and Gabon use the CFA franc and are not on the least developed countries list.
As part of the currency’s existence and maintenance, France holds 50 percent of these countries’ foreign reserves to guarantee that the CFA franc stays convertible into euros at a fixed exchange rate, according to VoiceofAfrica.
These compulsory deposits are considered by many Africans to be a colonial tax, started more than half a century ago as part of the region’s colonisation. The policy maintains strict requirements.
During colonisation, African countries had to place all their financial reserves in the French treasury. That requirement has decreased over the years, with 50 percent of their foreign exchange kept at the bank of France since 2005, according to Roape.
While some may argue that France’s control over the CFA franc ensures financial stability within the region, others say that the currency is an unnecessary colonial relic that stalls economic development in the individual countries and the region as a whole.
Current restrictions stop countries using the currency from exporting competitive products, obtaining affordable credit, working for the integration of continental trade, or fighting for an independent Africa free from any colonial control, according to TheCenterForAfrica.
Critics of CFA franc in Africa
Critics of the currency argue that the current deal sees African countries channel more money to France than they receive in aid.
In addition, the individual African countries have no say in deciding key monetary policies that affect their people, as these are determined by European countries as part of the European Union, according to the BBC.
This foreign control over decisions that should be made on an African level is detrimental to the economic growth of the region, critics say. Euro Zone monetary policy has an anti-inflation bias that does not ideally cater for the reality in African countries.
The CFA franc is considered by some to be a barrier to industrialisation and economic development, and does not stimulate trade integration between fellow Francophone nations or allow banks to provide adequate credit for their economies.
In 2017, French President Emmanuel Macron apologised for some aspects of France’s colonial past. He called for the CFA franc to be gradually phased out, acknowledging the need for francophone Africa to be given its economic independence, according to Politico.
Macron has been vocal about change in Africa, and for the continent to be given more authority over its own future and development.
That being said, little has been done since 2017 to phase out the CFA franc, despite continued protests from people throughout Africa. African leaders should also take their share of the blame for this lack of action.