Face 2 Face Africa

by , at 10:42 am, September 12, 2017, Business

Why Some Africans Are Uncomfortable with CFA Franc

CFA franc
West African protesters calling for the end of CFA franc. Photo credit: The Citizen

The emotive debate around the continued use of CFA franc has once again resurfaced in some countries in West and Central Africa, with some experts arguing that the region has outgrown the currency.

Last week, a popular Franco-Beninese activist was arrested and charged with burning a 5,000 CFA franc note in protest against its continued use in the region. Kemi Seba, who has since been acquitted by a Senegalese court, was arrested following an application by the Central Bank of West African States (BCEAO) to have him arrested.

Seba, whose real name is Stellio Gilles Robert Capochichi, is one of the activists in West and Central Africa that want the CFA franc to be done away with. They argue that the currency, which was introduced in the region by French expansionists in the early 1940s, is a reminder of the abuse their forefathers suffered at the hands of their colonizers.

At a demonstration in Dakar, Senegal last week, Seba burnt a 5000 CFA bank note in a symbolic protest against the currency. The act prompted BCEAO to go to court seeking the prosecution of Mr. Seba for “destroying property”. But the controversial activist was later acquitted on a technicality as stated by the BBC.

According to the Senegalese Penal Code, destruction of a single bank note does not amount to a crime.

Colonial Currency

The CFA franc was established by France for purposes of serving as a legal tender in its African colonies, but years after the French administration left the continent, CFA franc continues to influence the West and Central African regions.

The currency is attached to the euro, which allows it to enjoy great financial support from the French treasury. Although some people see CFA franc as a guarantee of economic stability in the region, others see it as a colonial relic.

In this arrangement, African countries must deposit half of their currency reserves in the French treasury in order for them to be guaranteed a fixed exchange rate with the euro. Most Africans in the Francophone countries are totally opposed to this arrangement, saying it has led to slow development in their countries.

They argue that African countries end up channeling more money to France than they get in the form of aid.

Some also accuse African leaders of being complicit with France, insisting that African leaders have no say in making monetary policies related to CFA franc. All decisions regarding the currency are made by European countries.

Members of the anti-CFA movement maintain that the 14 African countries currently using CFA franc will only realize full economic development when they get rid of the currency.

The Economic Community of West African States (ECOWAS) plans to create a common currency that will untangle the region from the yoke of the colonial “currency”.