The CFA Franc Zone: a modern reincarnation of a colonial relic

This study assesses the French Community of Africa, commonly known as the CFA Franc zone. This is a monetary union comprising 14 African countries in West and Central Africa. The purpose of the study is to examine the manner in which this monetary union affects the development of these 14 African member states, with special reference to the membership of France in the union. For various reasons, including language, time and other resource constraints, and the prohibitive geographical distance, this study has had to rely heavily and exclusively on the review of literature on the subject matter, as opposed to other more popular research procedures. The key finding of this research is that the CFA Franc zone, from its inception, was never conceived as a union of equal partners. There are unmistakable features that point to the superiority of France in the union. For example, the union was proposed by France as a condition for the attainment of independence by these former colonies. They had to sign the colonial pact made up of economic, political and military arrangements, all of which give France the upper hand and huge advantages in the union. These include the fact that the African CFA Franc zone countries have to deposit 50 per cent of their foreign reserves into the French treasury; they have to peg their currencies to the Euro on a fixed exchange rate system; and they are not allowed to devalue their currencies as they see fit, because in the union agreement, this is the exclusive prerogative of France, which can itself devalue these currencies unilaterally. This study concludes that the CFA Franc zone is, indeed, a classical form of neo-colonialism. Thus, short of abandoning this union altogether, the study recommends a fundamental and momentous restructuring of the union to make it a win-win arrangement in which the union benefits both parties and facilitates the genuine socio-economic and political development of the CFA Franc zone countries