Accessibility links

Breaking News
News

African Economists Push to Sever Colonial-Era Monetary Ties with Europe


Some economists say ending the peg between CFA francs, shown here on a bus in Abidjan, and the euro would help West and Central African economies.
Some economists say ending the peg between CFA francs, shown here on a bus in Abidjan, and the euro would help West and Central African economies.

While weak European economies create concerns around the world, economists in Africa are pushing to sever ties binding the continent to former colonial powers. One idea is to decouple the CFA franc, the currency in 14 African countries, from the euro.

One of the speakers at the Revival of Pan-Africanism Forum was economist Salomon Samen, who advises several African countries on economic policy.

Samen calls the post-World War II CFA franc, which is used in West and Central Africa, an umbilical cord that needs to be cut. A good start, he says, would be to loosen the fixed relationship between the euro and the CFA franc.

"The fixed parity between the CFA and the euro is no longer justified because trade between Africa and Europe has changed drastically over recent years with the greater role being played by Asian countries and China, and with a lot of trade being done with the United States as well. So it is not acceptable to have a simple fixed parity between the CFA franc and the euro. It has got to be overhauled," he said.

Another African economist, Ivory Coast national Nash Kpokou, wants CFA franc countries to have their own currencies, so that African economies can increase their competitiveness and not be so influenced by the uncertain standing of the euro.

"If we have our own currency, this will really help our economies to deal with most of the countries and they will be able to sell their goods to the rest of the world," he said.

Kpokou calls the current system "banking tourism" that has benefited France and French-backed leaders, not African populations, even when their countries post solid economic growth.

"When we talk about growth it should be inclusive. They miss that it should take into consideration reducing poverty. So when growth is not taking into consideration the population, then there is no growth," he said.

Kpokou also notes that the current system requires participating countries to hold most of their foreign reserves in accounts held at the French Treasury. Other participants at the forum said that instead of relying on this system to reassure investors who are wary of doing business in a highly-indebted region, African states need to improve their business and investment environments, and increase intercontinental trade.

XS
SM
MD
LG