The CFA franc has never been as much debated as in recent months. It was one of the stakes of the 2016 presidential election in Benin with the presence of Lionel Zinsou, former Franco-Beninese banker and prime minister-candidate on the political scene. Created since 1945, the CFA franc has not contributed to the development of the countries that use it. Considered the only monetary system to have survived decolonization, the CFA franc is based on four principles and a management and operation that only arrange for France.
The centralization of foreign exchange reserves
Since 1945, the countries of the CFA zone have been forced to deposit the major part of their export earnings with the bank of France. Thus, from 1945 to 1973, the countries of the CFA zone deposited more than 75% of their export earnings in so-called “operations” accounts housed in the French Treasury. From 1973 to 2005, the deposit rate has dropped to 65% and has remained at a minimum of 50% since 2005. Critics of the CFA franc believe that these foreign exchange reserves are used to finance the development of France at the same time Countries in the CFA zone are struggling to take off economically. Those who believe that the CFA franc is a currency of integration like Lionel Zinsou, consider that the deposits of the countries of the zone CFA are minute and do not penalize them.
France recognizes that the CFA franc penalizes Africans
The Euro-CFA fixed exchange rate
By decreeing the CFA franc on December 26, 1945, General De Gaulle decided with the French government to tie it up to the French franc. This stowage subsequently evolved with the creation of the euro area. This parity is a brake on competition insofar as the euro is a strong currency and prevents the countries of the CFA zone from industrializing and being able to export raw materials and finished products at attractive prices on the world market . Today, with the fall in commodity prices, countries in the CFA zone are obliged to use loans from financial institutions such as the International Monetary Fund, even though billions are deposited by these countries to the French Treasury.
The principles of free convertibility and free circulation CFA / Euro
These two important principles of operation of the CFA zone favor French investments in the CFA zone and the repatriation of capital between the countries of the zone and France. At the same time it is almost impossible to freely transfer currency between the countries of the zone.
After 70 years of existence, it is clear that the CFA franc has not contributed to the development of the countries that use it. It is a brake on their industrialization and does not favor by the rise of their economies. Some African leaders have begun to agree with many critics of the CFA franc. Roch Marc Christian Kaboré, the newly elected president of Burkina Faso, said: “There are points of discussion and reflection that are underway. It is clear that sooner or later it is a discussion that must be opened Also the difficulties that Europe has been experiencing in recent years “. Idriss Déby Itno of Chad added: “ There are clauses that are outdated, these clauses will be necessary in the interest of Africa and in the interest of the . The economy of Africa down “. France is open to an evolution of the CFA franc. She expects this approach to come from African countries. French Finance Minister Michel Sapin said: “It is the decision of the Africans that is necessary, not the decision of France. And I have always shown my great availability if there were Proposals for progress in this or that direction on the part of this or that leader “.