Nigeria leads 6 nations opposed to change of CFA franc to Eco

[Samori Toure]

Six West African countries have criticised what the changes of the regional CFA Franc currency to Eco, saying its not in line with what was agreed for the adoption of a single regional currency.

Members of the West African Monetary Zone (WAMZ) Convergence Council said they “noted with concern” the December 21 announcement “to unilaterally rename” the CFA franc, used by eight countries, as the Eco by 2020.

The move “is not in line” with plans by regional bloc ECOWAS to adopt a single currency also called the Eco, they said in a statement issued after talks in the Nigerian capital Abuja.


They called for an extraordinary summit of WAMZ “to discuss this matter and other related issues.”

The rebuke came after a major announcement that sought to turn the page on CFA franc’s perceived colonial-era connection.

Eight countries use the West African CFA franc — Benin, Burkina Faso, Ivory Coast, Mali, Niger, Senegal and Togo, which are former French colonies, as well as Guinea-Bissau, a former Portuguese colony.

The currency has long been attacked as a colonial relic.

It was set up by France in 1945 and is backed with reserves held at the Bank of France in Paris.

Macron and Ouattara’s announcement did not say how the change would dovetail with plans by the Economic Community of West African States (ECOWAS).

The 15-nation bloc last year set the goal of creating a single currency, also named the Eco, in 2020.

Eight ECOWAS nations use the CFA franc but the bloc’s economy is dominated by Nigeria, and their monetary criteria — essential for a smooth transition to a single currency — are very divergent.

The WAMZ Convergence Council meeting was attended by finance ministers and central bank governors of The Gambia, Ghana, Liberia, Nigeria and Sierra Leone, which are English-speaking, and of Guinea, which is French-speaking and chaired the talks.

The December 21 announcement applies only to the CFA franc that is used in West Africa.

A parallel CFA franc is used by six other countries in central Africa. Its future, too, also faces questions as a result of the announcement in Abidjan.

Nigeria leads 6 nations opposed to change of CFA franc to Eco | Africanews

 

[Samori Toure]

I knew that Guinea was going to follow Sierra Leone and Liberia in whatever decision was made, because those 3 countries are like a small trading bloc. However, I was surprised to see Ghana join the crew of 6.

 

[MischievousMonkey]

They peeped how France and its African puppets want to hijack the ECO project and "subtly" force them to get off the boat.

How you the head of state of only one member of the ECOWAs and decide unilaterally that you and the 7 other countries of your little regional union are going to not respect the plan at all and change the currency already? without consulting anybody except the French president, without warning, without respecting the engagements taken?

Only in Africa this is a hijacking move. Francophone African puppets want to mess the ECO enough so that the anglophone countries, that do not respect France, back off and give it up

That would allow them, in their opinion, to not only continue French neo-colonization but also calm the populations who can't stand France presence no more.

I wonder what will be the anglophones' next move. Will they let the Francophones to their bs and do their own thing? Will they fight it out?

 

[mbewane]

Good. Anglophones countries might as well move forward on their own because la Françafrique is still very much in place as Ouattara showed once again. I just finished reading this book

and you see how deep this shyt goes. I mean I knew it was deep but I was like at some stuff. And this is much more about "puppets", there's a reason those presidents are presidents in the first place. Same goes with all the other people we talk less about, the civil servants working in the various monetary and financial institutions managing the Franc CFA.

 

[phcitywarrior]

Man...y'all don't understand how France has its former colonies in a vice grip. I was at a conference and a former Nigerian MD at a department of industry told me what we witnessed is very common.

Example: You'll have the ECOWAS states agree to do X at 7pm on Sunday night. On Monday at 8am a call from Paris comes in and then by 12pm on that same Monday the Francophone countries will choose to do Y.

Crazy.

 

[mbewane]

Man...y'all don't understand how France has its former colonies in a vice grip. I was at a conference and a former Nigerian MD at a department of industry told me what we witnessed is very common.

Example: You'll have the ECOWAS states agree to do X at 7pm on Sunday night. On Monday at 8am a call from Paris comes in and then by 12pm on that same Monday the Francophone countries will choose to do Y.

Crazy.

Yep. And the added thing is that if one country tries to strong-arm France, Paris can rely on other countries to put pressure on that country to cave in, since there's 0 solidarity and they all want to make sure they still have access to Paris and their cashflow/army protection. Until there's more solidarity and overall agreement that things must change, the system will remain, regardless of who is put/kept in power. Lest we forget that the franc CFA benefits local economic elites (and middle-classes to an extent).

 

[Red Shield]

Man...y'all don't understand how France has its former colonies in a vice grip. I was at a conference and a former Nigerian MD at a department of industry told me what we witnessed is very common.

Example: You'll have the ECOWAS states agree to do X at 7pm on Sunday night. On Monday at 8am a call from Paris comes in and then by 12pm on that same Monday the Francophone countries will choose to do Y.

Crazy.

damn

 

[phcitywarrior]

Yep. And the added thing is that if one country tries to strong-arm France, Paris can rely on other countries to put pressure on that country to cave in, since there's 0 solidarity and they all want to make sure they still have access to Paris and their cashflow/army protection. Until there's more solidarity and overall agreement that things must change, the system will remain, regardless of who is put/kept in power. Lest we forget that the franc CFA benefits local economic elites (and middle-classes to an extent).

This is also another thing that gets overlooked as well.

Can you explain to me how the CFA benefits the local elites? I heard something along the lines that it allows them to export their raw materials for cheap and at a guaranteed exchange rate

 

[Samori Toure]

Yep. And the added thing is that if one country tries to strong-arm France, Paris can rely on other countries to put pressure on that country to cave in, since there's 0 solidarity and they all want to make sure they still have access to Paris and their cashflow/army protection. Until there's more solidarity and overall agreement that things must change, the system will remain, regardless of who is put/kept in power. Lest we forget that the franc CFA benefits local economic elites (and middle-classes to an extent).

Not Guinea. Those other French flunkies can call Guinea as much as they want, but Guinea is more aligned with Sierra Leone and Liberia. Those alliances are actually historical and they have survived stuff like civil wars and ebola. That is why I have never understood how the Ivory Coast got to be the way that it is, because they are going to be isolated in a little while.

 

[mbewane]

Not Guinea. Those other French flunkies can call Guinea as much as they want, but Guinea is more aligned with Sierra Leone and Liberia. Those alliances are actually historical and they have survived stuff like civil wars and ebola. That is why I have never understood how the Ivory Coast got to be the way that it is, because they are going to be isolated in a little while.

Guinée doesnt even use the Franc CFA, since Sékou Touré was the first to declare immediate independence from France in '58

Ivory Coast is the way it is because since forever all the presidents have been chosen/validated by France. That's how Ouattara got in power in the first place. Note that he was a very high ranked of the BCEAO (don't know the name in english, Banque Centrale des Etats d'Afrique de l'Ouest, the Central Bank that supervizes the CFA in that area). Order was give from Paris to freeze banks and whatnot, and when that wasn't enough, the army was sent. One former Budget Minister under Gbagbo (Justin Koné Katinan) said (I'm translating) : "I saw the Françafrique with my own eyes. I saw how our financial systems are totally dominated by France...I saw how a single french civil servant can bring an entire country to a halt".

That's why Ivory Coast is how it is for the moment being. And obviously the ruling class and elites could care less about being isolated, since they still have Paris' approval and support.

 

[mbewane]

This is also another thing that gets overlooked as well.

Can you explain to me how the CFA benefits the local elites? I heard something along the lines that it allows them to export their raw materials for cheap and at a guaranteed exchange rate

It's technical financial stuff so I won't be able to get into details, but basically the guaranteed exchange rate means they can send their CFA to French banks (or European, since the it also translates in a guaranteed exchange rate with the euro) without any exchange costs. Basically the CFA is, more-so than a different currency, a version of the Franc, under another denomination. (back in the day, it was all part of the same zone franc) And now, of the euro. Which is also why, if I understood correctly, you can't change CFA to dollars for example. First to euros, then to dollars. Hell, you can't even use the same CFA franc from one zone (CEMAC) in the other (CEDEAO).

Now, that means that it's extremely easy to send their money to France/Europe, as one might want to do when, say, your country is kind of unstable. Which is the case of damn near all Francophone countries, coincidentally. Basically, sending the money out means it's safe. Also consider that these are people who send their kids to study abroad, go on holidays abroad, get hospitalized abroad, invest abroad (again, because investing in France/Europe might be seen as more safe than in CAR or Mali). Obviously we're talking about a small portion of the population here.

Also, given the fact that this (among other things) has given a huge advantage to french companies, the local industry has not been able to develop itself, even less so since the IMF started imposing Structural Adjustment Plans (under french pressure, who has always had high-ranked officials in the IMF, when they were not at the very top : most recently Strauss-Kahn and Lagarde. No coincidence in all of this). So that means that a lot of goods have to be imported. Cars, fridges, damn near everything. The people who can import pay less than they would if there wasn't this guaranteed exchange rate with no conversion fees, so they win at this too.

 

[phcitywarrior]

It's technical financial stuff so I won't be able to get into details, but basically the guaranteed exchange rate means they can send their CFA to French banks (or European, since the it also translates in a guaranteed exchange rate with the euro) without any exchange costs. Basically the CFA is, more-so than a different currency, a version of the Franc, under another denomination. (back in the day, it was all part of the same zone franc) And now, of the euro. Which is also why, if I understood correctly, you can't change CFA to dollars for example. First to euros, then to dollars. Hell, you can't even use the same CFA franc from one zone (CEMAC) in the other (CEDEAO).

This makes sense now. It forces the West African nations to keep rooted to France.

If you can exchange 1000 CFA for 1 Euro with no fees, then it doesn't make sense to source goods from say the US. You'd lose money exchanging from Euros to USD. But the pegged rate also doesn't allow the West African states to devalue their currency and make their exports cheaper. They have to go to Paris first.

EDIT: Just used 1000 CFA as an illustration. The official rate is like 655 CFA to 1 Euro or so.

 

[mbewane]

This makes sense now. It forces the West African nations to keep rooted to France.

If you can exchange 1000 CFA for 1 Euro with no fees, then it doesn't make sense to source goods from say the US. You'd lose money exchanging from Euros to USD. But the pegged rate also doesn't allow the West African states to devalue their currency and make their exports cheaper. They have to go to Paris first.

That's exactly it (the exact rate is something like 1 euro = 647 CFA iirc). It makes it harder to do business with other countries than France/European ones (other European countries don't really have the interest/connections/fire power to build strong ties though). And indeed the pegged rate means that you can't devaluate to become more competitive. Even worse, the euro itself is a strong currency, and the CFA became pegged to the euro when France switched over from the franc français. So those african countries, who need investment (thus a more flexible budget) now basically HAVE to follow the EU's budget rules, specifically the "convergence criteria", which are strict on public spending and inflation among other things. So you have developping countries with a young population and who still need huge infrastructure investments who are following the same budgetary rules as developped countries with an aging population who already has done it's heavy investment (thanks in part to budgetary flexibility back in the day). It's fukked up on so many levels.

 

[2Quik4UHoes]

I have nothing to say except salute to Thomas Sankara and Sekou Toure.

 

[Secure Da Bag]

That's exactly it (the exact rate is something like 1 euro = 647 CFA iirc). It makes it harder to do business with other countries than France/European ones (other European countries don't really have the interest/connections/fire power to build strong ties though). And indeed the pegged rate means that you can't devaluate to become more competitive. Even worse, the euro itself is a strong currency, and the CFA became pegged to the euro when France switched over from the franc français. So those african countries, who need investment (thus a more flexible budget) now basically HAVE to follow the EU's budget rules, specifically the "convergence criteria", which are strict on public spending and inflation among other things. So you have developping countries with a young population and who still need huge infrastructure investments who are following the same budgetary rules as developped countries with an aging population who already has done it's heavy investment (thanks in part to budgetary flexibility back in the day). It's fukked up on so many levels.

This whole paragraphs is gems. I learned quite a bit about currency off of this. The highlighted is most striking to me though.