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Death to the CFA franc. Long live the CFA franc

African politics

Death to the CFA franc. Long live the CFA franc

Plans for eight west African nations to launch a ‘liberated’ currency have gone awry

Emmanuel Macron, left, and Alassane Ouattara announced the end of the CFA franc in December © Sia kambou/AFP/Getty

Six months ago, in Abidjan, the commercial capital of Ivory Coast, French president Emmanuel Macron stood next to his Ivorian counterpart Alassane Ouattara to announce the end of the CFA franc. It was meant to be a brave new world for French-speaking west Africa.

After 150 years of French colonialism and six decades of neocolonialism, eight countries in the region were to take back control. Instead of using the French-backed CFA franc that for many had become a toxic symbol of lingering imperialism, they would rename their “liberated” currency the eco. The only problem is that someone else had already taken the name.

The name eco was already associated with a putative currency union that could one day involve not only the region’s French-speaking nations but also its English-speaking ones. Concern about the overlap reared up again this week when Muhammadu Buhari, president of Nigeria, tweeted testily of his “uneasy feeling” about the new francophone currency. “It’s a matter of concern that a people with whom we wish to go into a union are taking major steps without trusting us for discussion.”

What might seem like a turgid argument over a name reveals how much of Africa, decades after colonialism’s formal end, remains separated along colonial and linguistic faultlines. The row also shows how hard it is to disentangle — even symbolically — Paris’s relationship with French west Africa.

Scrapping the CFA franc was part of a broader policy vision nurtured by Mr Macron — the country’s first president born after African independence — of putting relations with Africa on a postcolonial footing. Some progress has been made, although France is bogged down in a military intervention against jihadism in the Sahel.

Mr Macron has successfully repaired relations with Rwanda, which had gone so off the rails that the central African country formally ditched French for English a decade ago. He mended fences with Paul Kagame, Rwanda’s president, whose forceful leadership carries an outsized regional influence. Mr Macron won Mr Kagame’s praise by opening up national archives into alleged French involvement in the 1994 genocide and by championing a Rwandan, Louise Mushikiwabo, as secretary-general of the International Organisation of Francophonie. Last month, the arrest in Paris of Félicien Kabuga, wanted for 23 years for his alleged role in the genocide, was a further sign of warming relations.

Mr Macron has commissioned a far-reaching inquiry into the issue of returning stolen African art. He has also led a successful diplomatic campaign to woo big English-speaking African countries, particularly Ethiopia, Nigeria and South Africa, traditionally ignored by both French business and diplomats.

Yet disengagement from the CFA franc has not gone quite to plan. Paris decided to make the break after Matteo Salvini, Italy’s former deputy prime minister, said France used the currency to exploit its former colonies. As well as the name change, France agreed to drop the incendiary requirement that 50 per cent of the currency’s reserves be kept in Paris and give up its representative on the regional central bank.

Yet in substance, as critics pointed out, the arrangement would remain unchanged. Those who detest French presence in the region — of whom there are many — want to ditch the peg entirely so African countries can devalue their currency if they wish. But, at the urging of African leaders, including Mr Ouattara, a former banker, Paris promised to guarantee the currency’s peg with the euro. In an interview with the Financial Times last week, Macky Sall, president of Senegal, said France’s backing guaranteed stability even in the midst of the coronavirus pandemic.

The bigger problem lies with Nigeria and other English-speaking commodity producers such as Ghana. Few economists believe that a currency union involving Nigeria — which accounts for a gargantuan 70 per cent of the region’s output — makes much sense for the smaller economies in its shadow. It would tether their fortunes to an oil producer whose exchange rate swings wildly according to the whims of international petroleum markets.

The impasse over the eco leaves west Africa’s French-speaking nations in a currency limbo. Having proposed the end of the CFA franc, they find themselves stuck between the colonial-tainted stability offered by France and the potential volatility of an Anglosphere dominated by Nigeria.

In December, after the Abidjan announcement, much of the French press declared the CFA franc to be dead. Unfortunately, the eco, its would-be replacement, has been stillborn.

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