The Collapse Of The Euro And The Crumble Of The CFA

The euro zone continues to falter as uncertainties surrounding the fiscal actions of Greece and Italy, skyrocketing unemployment figures and living costs lead to an even gloomier prediction. Conversely, most African economies are increasingly recording impressive growth rates in GDP and in other yardsticks.alt

One sore point of convergence in the Euro-Africa recession and growth dichotomy, however, is the Franc Zone. That is, those former French colonies still under the economic protection of France as evidenced by their use of the CFA franc as a unifying currency. While the rest of sub-Saharan African countries have in recent times recorded between 5 – 11% growth rates, the CFA franc zone has lagged behind at 2 – 3% and even less.

The CFA originally meant Colonies Francais d’Afrique or French Colonies of Africa and as the name implies was the currency imposed upon France’s colonies at the end of WWII. Several years after Independence, the name CFA has remained and only seemingly amended to now mean Communaute Financiere Africaine, or the African Financial Community.

In practical terms, and apart from the mere exchange of the wordings of the letters C and F, not much has changed in the operating system of the CFA franc. From creation until present times, the CFA franc exchange rate was fixed and pegged to the French Franc, until France pledged allegiance to the European Union. France immediately transferred the loyalty of her franc zone protectorates by pegging the fixed exchange rate of the CFA franc to the Euro.

The reason for the creation of the CFA in 1945 remains the motive behind its enthronement in French West and Central Africa till date. WWII had bastardized the French economy leaving the French franc seriously devalued. The French Treasury came up with the idea that it would make sound economic sense to create a separate currency for its colonies. A currency that will be of a higher value than the valueless French franc will yield much returns to French exports of manufactures to the colonies, and increase the profits accruable to the numerous French companies operating in the colonies. Couching this far-from-altruistic action in the usual colonial humanitarian rhetoric, Rene Pleven, French Finance Minister announced that “in a show of her generosity and selflessness, metropolitan France, wishing not to impose on her far-away daughters the consequences of her own poverty, is setting different exchange rates for their currency.”

Over the decades that followed, the CFA franc was variously unilaterally devalued by France, the latest being in 1994. With the switch of allegiance to the Euro in 1998, the CFA franc now became intertwined with the ups and downs of the Euro currency.

France continues to gain overwhelmingly from the continued existence of the CFA franc. French companies still make-up the greatest share of the private sector of the franc zones, and are awarded most public contracts. The CFA fixed exchange rate, pegged to the Euro and overvalued, makes it possible for these French companies to be shielded from the Euro depreciation. As the CFA franc is overvalued, franc zone countries are at best incapacitated in their ability to build home grown industries to compete effectively with their French counterparts. This is made worse by the fact that the French Treasury mandates all countries using the CFA franc to remit 50% of their foreign exchange reserves to France.

When viewed from the lenses of the prevailing international monetary conventions, the continued pegging of the CFA franc fixed exchange rate to the Euro smacks of double standards. The United States has consistently chided China for pegging its currency to the dollar, declaring it a practice that destabilizes the global trading arrangement. The United States has however ignored France and the EU’s pegging of the CFA franc fixed exchange rate to the Euro.

With its December 2011 front cover “Africa Rising,” The Economist retracted its May 2000 cover story, “Africa, the Hopeless Continent.” The revered international magazine came rather late, to recognize and extol the growth of businesses, investment opportunities and a conducive transactional climate in Africa. But the magazine forgot or ignored the fact that almost the whole franc zone has remained stagnant and exempt from this surprising and celebrated turn in Africa’s economic situation. The CFA franc domination of French West and Central Africa has all but ostracized the countries involved from the increasing intra-African trade and economic buoyancy.

Apart from the grave and debilitating social-psychological effect of continued dependence on one’s former and current exploiter for economic sustenance, the seemingly intractable Euro zone crises has made the franc zone a misnomer amidst sub-Saharan Africa’s exponential progress.

For the fourteen CFA franc zone countries to record success like the rest of Africa, they must resolve to collectively take a decisive action against one of the major sources of their continued economic backwardness, the CFA franc. But that would almost amount to handing the franc zone a gun to hunt in a forest filled with lions or choose starvation instead.

France is feared in the CFA zone. Severe and deadly covert manipulations aside, France holds enormous political influence over its former territories and has made it clear in the past that it would employ whatever means possible to maintain the status quo.

But in the face of starvation, the franc zone must realize that death must come one way or the other and it is only wise to die hunting for food than to die avoiding death. What the zone needs is enormous political will, the kind exercised by President Kagame of Rwanda when he booted France out, changed the official language from French to English and joined the Commonwealth. This kind of political will calls for radical actions on the part of the franc zone, specifically, a coup against the CFA by the issuance. Make no mistake about it; France will fight like a wounded lion. The franc zone is its last hope in terms of economic returns and exploitation. But there seems to be no easy way out for the franc zone, they must unite and fight to take back their currency, their future and their lives.

Chika Ezeanya is the author of Before We Set Sail www.beforewesetsail.com Some of her articles can be found on www.chikaforafrica.com



1
Re: The Collapse Of The Euro And The Crumble Of The CFA
Bamaguje posted on 05-04-2012, 16:15:47 PM
QUOTE:
...most African economies are increasingly recording impressive growth rates in GDP

Given that this so called 'impressive growth' of African economies is largely due to export of primary commodities as in the colonial era, I am unimpressed.
With the exception of South Africa, the economies of most sub-Saharan African countries is yet to make the transition to manufacturing industrialization as the Asian Tigers. So all the glib patronizing talk of 'African Lions' is utter balderdash.

Nigeria is among the so called African Lions with 'impressive growth rate', but we all know its due high crude oil prices rather than increased economic productivity...which epileptic power supply and insecurity will not allow.
Our minister of Youth development recently announced we have 67 million unemployed youths.
i.e. 67 million potential armed robbers, kidnappers, hired assassins, Boko Haramists, Niger Delta militants and other such unsavoury characters.
QUOTE:
...former French colonies still under the economic protection of France as evidenced by their use of the CFA franc

Given that the CFA franc countries remit 50% of their foreign exchange to Paris, it appears to me that the African countries are the ones subsidizing France.
Re: The Collapse Of The Euro And The Crumble Of The CFA
Olaitanladipo posted on 05-05-2012, 04:20:14 AM
"The euro zone continues to falter..." -Chika Ezeanya

The Euro zone is unravelling because its motives and objectives are clearly now unachievable.

Like Eurodollar devised by the then USSR during the cold war to protect their foreign exchange holdings from America's probable sabotage, the € is a stealth political tool devised and financed by Germany, as an answer to the power of British £ Sterling. The UK remains the main bulwark against a reunited Germany's push for total economic domination of Europe. Domination they can only achieve through economic union.

France, by all accounts the greatest beneficiary of the introduction of the €, was happy to go along in the promise that it would cost their nation nothing. Germany underwrote the whole project. Poor countries like Ireland were 'bribed' with massive injection of EU cash, giving the impression of an economic 'miracle' that merely inspired carpet-bagging applications from even poorer European countries.
However, the last global recession put a spanner in the works of what German politico-economists thought was a carefully laid plan to gang-up against and isolate the UK. The resulting reality is the crises we see in the economies of Greece, Spain, Ireland and others. It also halted Germany's back-door route of a parliamentary Europeâ€"to use political union to achieve an economic union.

"it appears to me that the African countries are the ones subsidizing France." -Bamaguje

CFA countries are underdogs when they should be calling the shots, because of selfish leaders kept in power only by French arms and military conspiracy. France, using the late Leopold Senghor of Senegal, nearly terminated formation of ECOWAS, which in its conception and by definition would have provided such needed clout. Even when formed eventually, they extorted so many concessions and exceptions that rendered the union ineffective as an economic power and relegated it to another African talk shop like the AU.
Re: The Collapse Of The Euro And The Crumble Of The Cfa
Emj posted on 05-06-2012, 20:02:37 PM
QUOTE:
The reason for the creation of the CFA in 1945 remains the motive behind its enthronement in French West and Central Africa till date. WWII had bastardized the French economy leaving the French franc seriously devalued. The French Treasury came up with the idea that it would make sound economic sense to create a separate currency for its colonies. A currency that will be of a higher value than the valueless French franc will yield much returns to French exports of manufactures to the colonies, and increase the profits accruable to the numerous French companies operating in the colonies. *Couching this far-from-altruistic action in the usual colonial humanitarian rhetoric, Rene Pleven, French Finance Minister announced that \\"in a show of her generosity and selflessness, metropolitan France, wishing not to impose on her far-away daughters the consequences of her own poverty, is setting different exchange rates for their currency.\\"


Wias DT and Chaos to save this people from France.......ha
Re: The Collapse Of The Euro And The Crumble Of The Cfa
DeepThought posted on 05-06-2012, 23:11:09 PM
QUOTE:
Wias DT and Chaos to save this people from France.......ha


Parampapa! PARAMPAPA!!!

Here I am to the rescue.

Problem is those people don't want to be saved from France. Don't want to sound callous but they need to die out as quickly as possible. Sorry O but there is no other way

And when I say die, I don't mean just physical death alone, that is just one aspect. I mean they have to die to that mental attitude of servitude too. You can't do anything with people who think they are slaves. If they are unable to die mentally to the disgusting and naturally repulsive state they've put themselves in they should then merely die out physically alone then. And they will. .

This is how Wolves became dogs.(Genetically, some wolves were bred/tamed into submission, transformed into dogs and lost the independence of the wolf) what I mean by that is that Nature itself rejects this kind of abberation (of a specie acting unnaturally) and if you're not doing what you're supposed to be doing , then you will lose the privilege of remaining a member of that specie.

And how did this happen to the dog?
It happened through the promise of food. People can take offense O. I don't give a damn, but the analogy of this situation to the black man is clear to me. Our own food are shiny, shiny things and the psychological dependency and desperation to find meaning to our existence entirely and solely only through others.

When human beings no longer think or act like humans, then, they will no longer be human beings. And don't deserve to be. They should either die or become something different from human. A kind of subhuman. It is quite facinating to watch this same taming/tampering experiment being performed on the black man and the black man gleefully subjecting himself to it because of "food". Lets see if it will have the same effect it had on the wolf.

And then we'll have only oursleves to blame o

And its not just the so called Psychofones....






PARAMPARAMP!!!!
Re: The Collapse Of The Euro And The Crumble Of The Cfa
Chaos.com posted on 05-07-2012, 04:53:55 AM
QUOTE:
Wias DT and Chaos to save this people from France.......ha



TBH, the francophone countries do not look to me like they want or are willing to remove this bond from france. They do not have confidence in their own currency which is why they are still tied like mumus to france.
I do not know what they are afraid of. And it is only going to get worse.
With germany trying to take over europe and the world (as they could not do by force of arms) and dictating terms to greece, spain and france about euro debt. i fear the whole of west and central africa, would soon be under the economic might of germany and who knows where that would end up?

Any way we all know it is the white mans fault that the french colonies are still using CFA abi DT?
Re: The Collapse Of The Euro And The Crumble Of The Cfa
African Knight posted on 05-07-2012, 09:08:04 AM
QUOTE:
TBH, the francophone countries do not look to me like they want or are willing to remove this bond from france. They do not have confidence in their own currency which is why they are still tied like mumus to france.
I do not know what they are afraid of. And it is only going to get worse.
With germany trying to take over europe and the world (as they could not do by force of arms) and dictating terms to greece, spain and france about euro debt. i fear the whole of west and central africa, would soon be under the economic might of germany and who knows where that would end up?

Any way we all know it is the white mans fault that the french colonies are still using CFA abi DT?
Well, I'm guessing those West/Central Africans will start chanting in German: Wilkkomen mein fuhrer Frau Merkel! ie Welcome my leader, Mrs Merkel! or thereabouts...
Re: The Collapse Of The Euro And The Crumble Of The Cfa
Emj posted on 05-07-2012, 10:43:29 AM
Mennn DT and Chaos didnt disappoint at all, plus including the late General....lols.

The donkey remains a beast of burden till it decides to take the bull by the horn/s.....double lols
Re: The Collapse Of The Euro And The Crumble Of The CFA
Prof penkelemess posted on 06-03-2012, 19:01:54 PM
Chika,

1. can you do some read-up on

economics:

PLEASE !!!

that does NOT seeem to be your forte...

2. how much is/ has Kagame been paying you to do his PR ??? Sorry-o ...

except for 2/3 countries all CFA kuntries are

DIRT-poor: they are !!!

when will you start doin' your journalistic

'home-work' ... ???

Please: come on !!!

Africa will only develop

when - 'among others'

'idiotic GUARDIAN-speak - journalists do their home-work - instead of repeating CHEAP prejudices:

yes:

France is *bad' but let''s get the facts

RIGHT !!!

THAT WOULD EVEBN HURT BETTA 111

Prof

Chika :

it takes a littlle bit more than bein' enthused by Kagame to understand African economics,
even the CFA

you might even have tried to get the French right

maiS ces jours-ci on parle uniquement anglais au Ruanda,

et TOI tu le parles ... pan-afriquement:


COME ON !!!!

after KAGame you do NOT want TO work

for that ex-GUARDIAN Whore who has been whoring for that jONATHAN :::

GERD

cHIKA:

please !!!

do your home-work!!!

if you want to hit France hard,

you have to get your facts right:

and these days it is so ... EASY

to do !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Re: The Collapse Of The Euro And The Crumble Of The Cfa
DeepThought posted on 06-03-2012, 19:59:03 PM
Mein Oberstgruppenführer Prof

of the Bavarian forest and

happless survivor of happy Dresden.

Mein dear Prof who has nothing useful

to say.

Mein Herr Professor! If only we had Not lost the

war we would be frying monkeys like

this Chika... Instead of being reduced to the pitiful

state of harmlessly trolling

the internet spitting impotent vernom?

Ach! Mein Gott!

Don't we just miss the glorious days of the

Konzentrationslager?

When we did what we do best and burnt the gas and

made it rain Jews?

As for this Chika? Having nothing useful to say

or do to benefit anyone, we shall put her to work!

and work shall set her free!

Mein Herr die bloede Kuh !!

The insult to the master race!!! She shall pay!

We shall free her and make her happy in her work!

As we made millions !!

She shall be happy in her vwork!

Yes, happy in her vvoork

Yes! Yes!

Along with all the Gypsies and Jews

We shall make her happy in her vvoork!

Sieg heil!

Seig Heil!!

Seig Heil!!
1
Please register before you can make new comment