Author: Hinsley Njila.

We reproduce his article “CFA: A CURRENCY DESIGNED TO KEEP FRANCOPHONE AFRICAN COUNTRIES POOR” here:

“Every year, the CIA and World Bank publish a list of the poorest countries in the world. In the current list available on the CIA website, the majority of the former French colonies in Africa fall in the ‘bottom 50’ of the poorest countries in the world. Coincidence or factors like bad governance, failure to invest in building human capital, and the myriad of other reasons? Well, you guessed right. It is all of the above… and then some. But one of the most important reasons is that which is most common to the block of former French colonies in Africa, and that is the CFA francs.

See, in 1945 General Charles De Gaulle and his officials knew that sooner than later there’d be enough pressure for them to grant independence to their colonies. So they created the CFA which guaranteed they’d control the colonies for many decades after the so-called independence. Today, the CFA is the common currency of 14 countries in West and Central Africa, 12 of which are former French colonies and are on the list of the world’s poorest countries.

The current predicament is an off-shoot of a colonial arrangement created by De Gaulle and his officials and ratified by African countries whereby 65% of their foreign reserves had to be stored in the French treasury. Another 20% of the reserves of these African countries were to cover financial liabilities; an arrangement which still holds some six decades later. African countries are also not allowed to know how much they have in their so-called ‘Operations Account,’ for it is a highly guarded French Secret. Even though these reserves benefit the Paris Bourse (stock exchange) almost entirely, recent rules enacted by France in 1973 further restrict the two central banks (CEMAC and WAEMU), to impose a cap on credit extended to each member country equivalent to 20% of the country’s revenue in the preceding year.

Interestingly, after the euro’s introduction, African CFA member countries still agreed to maintain a currency peg with France through an agreement drafted by the French Treasury. Thus, since 1945 the French treasury has had the sole responsibility of the convertibility of the CFA francs to other currencies. The fixed parity between the euro and CFA is based on official conversion rate for the French franc and the euro set in 1999 (FF6.55957 to one euro). As the CFA100 to FF1 exchange rate has not changed since the devaluation of 1994, the CFA franc-euro exchange rate is simply CFA665.957 to one euro, permanently fixed!

This lack of flexibility has had devastating effects on the economic growth of African francophone countries. Brian Weinstein says in his book “Africanisation in French Africa” how until 1960 France had not considered independence as a legitimate goal for its colonies, thus the reason France still controls the economies of its ex-colonies some 40 years later.

For every growth in France’s GDP, the euro appreciates against the Dollar, thus the CFA franc assumes too high an exchange rate. This puts the brakes on growth in the African economies that are also heavily dependent on commodities produced by Asia and South American countries that have much more flexible currencies. Put simply, a strong euro just kills CFA member economies as they experience declining export prices. Since 1994, growth in CFA member countries has remained quite modest. Overall output increased by less than 3%, compared to 8% in previous years. Rising oil prices has a devastating effect on non-oil producing CFA member countries because of the direct link to the euro. Oil prices are set in US Dollars and the value of the euro and CFA have risen some 30+% against the dollar. For the CFA and Euro, a strong exchange rate undermines export competitiveness as local goods are much more expensive.

A high fixed rate also kills economic growth in member countries, as it’s incompatible with productivity. The level of regional integration among member countries and the two central banks is remarkably low, even further undermining economic growth. Because the economies of Central African countries are heavily dependent on oil, and those of West Africa heavily dependent on other commodities, it is hard to argue for the long-term viability of the CFA unless of course you’re De Gaulle.

For these reasons, intellectuals like President Wade of Senegal and economists like Prof Mamadou Koulibaly (speaker of the Ivorian National Assembly) whom I met recently in London, among others argue that it is time for Africa to cut the umbilical cord with the French through their continued link with the euro through France. Today, the independence of francophone African countries is a myth. These countries need a currency that reflects their economies, one that is flexible and can benefit the commodities they produce; allowing them to be competitive in an increasingly global environment.


SOURCE: www.innocentsdeal.blogspot.com/2008/02/cfa-currency-designed-to-keep.html. February 9, 2008.





SOME SOURCE MATERIALS BY AND ABOUT KWAME NKRUMAH 4

101) Class, Power And Ideology In Ghana: The Railwayman Of Sekondi (Richard Jeffries)

102) The Military Politics In Nkrumah's Ghana (Simon Baynham)

103) Political Legacy Of Kwame Nkrumah of Ghana (Charles Boateng)

104) Administration Of Ghana's Foreign Relations 1957-65: A Personal Memoir (Michael Dei-Anang)

105) Development And The Development Trap: Economic Planning And External Borrowing In Ghana (Andrzej Krassowski)

106) Ideological Education And Nationalism In Ghana Under Nkrumah And Busia (D.K. Agyeman)

107) Kwame Nkrumah And The Church In Ghana 1945-1966(J.S. Pobee)

108) The Ghanaian Establishment (J.B. Danquah)

109) Nkrumah's Ideology (Kwadwo Afari-Gyan)

110) Nationalist Ideology In The Gold Coast (Kwadwo Afari-Gyan)

111) The United States And Decolonization In West Africa, 1950-1960 (Ebere Nwaubani)

112) African Philosophy (Paulin J. Hountondji)

113) Diplomatic Servant: Reflections Of Pioneer In Ghana's Diplomatic Service (S.E. Quarm)

114) The Coyaba Chronicles: Reflections On The Black Experience In The Twentieth Century (Peter Abrahams)

115) Peace Without Power: Ghana's Foreign Policy 1957-1966 (Kwesi Armah)

116) Ghana: Nkrumah's Legacy (Kwesi Armah)

117) Creating Political Order: The Party-States Of West Africa (Aristide R. Zolberg)

118) Guns And Gandhi In Africa: Pan-African Insights On Nonviolence, Armed Struggle And Liberations (Bill Sutherland & Matt Meyer)

119) Ghana's Foreign Policy In Retrospect (M. Addo)

120) The Ghana Coup, 24 February 1966 (Akwasi Afrifa)

121) Fighting For Africa: The Pan-African Contributions Of Ambassador Dudley J. Thompson And Bill Sutherland (Robert Johnson, Jr.)

122) A History Of Pan-African Revolt (C.L. R. James)

123) The Nkrumah And The Ghana Revolution (C.L.R. James)

124) Kwame Nkrumah's Liberation Thought: A Paradigm For Religious Advocacy In Contemporary Ghana (Robert. Y. Owusu)

125) Kwame Nkrumah: His Rise To Power (Bankole Timothy)

126) African And Caribbean Politics From Kwame Nkrumah To The Grenada Revolution (Manning Marable)

127) Kwame Nkrumah: Contributions To The African Revolution (Doreatha Mbalia)

128) Five Ideas That Change The World (Barbara Ward)

129) Building The Ghanaian State: Kwame Nkrumah's Symbolic Nationalism (Harcourt Fuller)

130) The Rise And Fall Of Kwame Nkrumah: A Study Of Personal Rule In Africa (Henry L. Bretton)

131) Organization Of African Unity: Twenty-Five Years On-Essays In Honor Of Kwame Nkrumah (Kwesi Krafona)

132) The Demigods: Eighties (Shridath S. Ramphal)

133) Mass Education And Community Development In Ghana: A Study In Retrospect (Kwa O. Hagan)

134) Political Corruption: The Ghana Case (Victor Le Vine)

135) Proudly We Can Be Africans: Black Americans And Africa, 1935-1961 (James H. Meriwether)

136) Great Britain And Ghana: Documents In Ghana History 1807-1957 (G.E. Metcalfe)

137) Western Involvement In Nkrumah's Downfall (Godfrey Mwakikagile)

138) Ghana's First Republic: The Pursuit Of The Political Kingdom (Trevor Jones)

139) West African Wager: Houphouet Versus Nkrumah (Jon Woronoff)

140) Three African Social Theorists On Class Struggle, Political Liberation, and Indigenous Culture: Cheikh Anta Diop, Amilcar Cabral, Kwame Nkrumah (Charles Simon-Aaron)

141) Kwame Nkrumah: The Man Who Brought Independence To Ghana (Bankole Timothy)

142) African Unbound: Reflections Of An African Statesman (Alex Quaison-Sackey)

143) Black Power: Politics Of Liberation in America (Charles Hamilton & Kwame Ture)

144) Where Others Wavered (Sam Nujoma)

145) Race Against Empire: Black Americans And Anticolonialism, 1937-1957 (Penny V. Eschen)

146) The Political History Of Ghana (1950-2013): The Experience Of A Non-Conformist (Obed Asamoah)

147) Ghana: A Political History From Pre-European To Modern Times (Kofi Awoonor)

149) Garvey: His Work And Impact (Rupert C. Lewis)

150) Aggrey Of Africa: A Study In Black And White (Edwin W. Smith)

151) How Europe Underdeveloped Africa (Walter Rodney)

152) Seven-Year Development Plan (J.H. Mensah)

153) Historical Dictionary Of Ghana (David Owusu-Ansah)

154) Encyclopedia Of African American History (Volume 1; Edited by Walter C. Rucker & Leslie M. Alexander)

155) The Encyclopedia Britannica (15th Edition, 1996)

156) Encyclopedia Of African History (3 Volumes; Kevin Shillington)

157) Encyclopedia Of Africa (Edited by Kwame A. Appiah & Henry Louis Gates, Jr.)

158) Africana: The Encyclopedia Of The African And African-American Experience (Edited by Kwame A. Appiah & Henry Louis Gates, Jr.)

159) Nkrumah's Legacy And Africa's Triple Heritage Between Globalization And Counter Terrorism (Ali Mazrui)

160) Uses And Abuses Of Political Power: A Case Study Of Continuity And Change In The Politics of Ghana (Maxwell Owusu)

161) Ghana And Ivory Coast: Perspective On Modernization (Aristide Zolberg & Philip Foster)

162) Ghana And The Ivory Coast, 1957-1967: Reflections On Economic Strategy, Structure, Implementation, And Necessity (Reginald H. Green)

163) The African Colonial State In Comparative Perspective (Crawford Young)

164) Pan-Africanism Or Neo-Colonialism?: The Bankruptcy Of The OAU (Elanga M'Buyinga)

165) Unity Or Poverty? The Economics Of Pan-Africanism (Ann Seidman & Reginald Green)

166) Dictionary Of African Biography (6 Volumes; Edited by Emmanuel K. Akyeampong & Henry Louis Gates, Jr.)

167) The Flagbearers Of Ghana (Kojo T. Vieta)

168) The Works Of Karl Marx, Friedrich Engels, Vladimir Lenin, Mohamdas Gandhi, W.E.B. Du Bois

169) The State Of Africa: A History Of Fifty Years Of Independence (Martin Meredith)

170) Encyclopedia Of Africa South Of The Sahara (Edited by John Middleton)

171) The History Of Ghana (Roger Gocking)

172) Coups From Below: Armed Subalterns And State Power In West Africa (Jimmy Kandeh)

173) Encyclopedia Of The Cold War (2 Volumes; Edited by William G. Gray & Ruud V. Dijk)

174) Ghana, 1957-1966: The Politics Of Institutional Dualism (Ben Amonoo)

175) Ghana Under Military Rule, 1966-1969 (Robert Pinkey)

176) The Business Of Decolonization: British Business Strategies In The Gold Coast (Sarah E. Stockwell)

177) African Intellectual Heritage (Edited by Molefi Kete Asante & Abu S. Abarry)

178) Black Africa: The Economic And Cultural Basis For A Federated State (Cheikh Anta Diop)

179) The World And Africa (W.E.B. Du Bois)

180) A Dictionary Of Marxist Thought (Edited by Tom Bottomore, Miliband, Laurence Harris, & V.G. Kiernan)

181) A History Of Economic Thought (William J. Barber)

182) African Universities And Western Tradition (Eric Ashby)

183) India Unrest (Sir Valentine Chirol)

184) The African Mind (Williams Abraham)

185) Pan-Africanism And East African Connection (Joseph S. Nye, Jr.)

186) Frantz Fanon: A Biography (David Macey)

187) Africa Contemporary Record: Annual Survey And Documents (Colin Legum)

188) A Political History Of Ghana: The Rise Of Gold Coast Nationalism, 1850-1928 (David Kimbe)

189) Organization Of African Unity And The Congo Crisis, 1964-65 (Catherin Hoskyns)

190) Long Walk To Freedom (Nelson Mandela)

191) Zambia Shall Be Free (Kenneth Kuanda)

192) Unity And Struggle (Amilcar Cabral)

193) Claim No Easy Victories: The Legacy Of Amilcar Cabral (Firoze Manji & Bill Fletcher, Jr.)

194) Sowing The Mustard Seed: The Struggle For Freedom And Democracy (Yoweri Museveni)

195) African Political Thought (Guy Martin)

196) The Fortunes Of Africa: A 5000-Year History Of Wealth, Greed, And Endeavor (Martin Meredith)

197) The Assassination Of Patrice Lumumba (Ludo De Witte)

198) The History Of Africa: The Quest For Eternal Harmony (Second Edition; Molefi Kete Asante)

199) Leadership And Growth (Edited by David Brady & Michael Spence)

200) The Political Economy Of Underdevelopment (T. Szentes)

We shall return…