Professor Mamadou Koulibaly, Speaker of the Ivorian National Assembly and Professor of Economics, sheds light on the economic devastation caused to the African member states of the CFA (Communauté Financière d'Afrique - French Community of
The CFA franc region represents a state-controlled zone of cooperation with, interestingly, the levers of control based in
The principals of monetary cooperation between France and the member states of the CFA zone were formulated in the 1960s in a colonial pact which was reviewed in the monetary cooperation convention of 23 November 1972 between the member states of the Banque des Etats de l'Afrique Centrale (BEAC) (Bank of Central African States) and the French Republic on one hand, as well as in the cooperation agreement of 4 December 1973 between the member states of the Union Monétaire Ouest-Africaine (UMOA) (or the Monetary Union of West African States) and the French Republic on the other hand.
Just before France conceded to African demands for independence in the 1960s, it carefully organized its former colonies in a system of compulsory solidarity which consisted of obliging the African states to put 65% of their foreign currency reserves into the French Treasury, based on the convertibility, at a rigid exchange rate of the CFA - a currency France had created for them.
Although the administration of the CFA currency was entrusted to a common central bank (comprising BCEAO and BEAC), these so-called African banks were only African in name. The reality is that they have no clout and are nothing more than huge bureaucratic institutions which have no monetary policies of their own. They exist to give the CFA countries the impression that they too are masters of their own monetary destiny, which in reality is not the case. The African CFA zone countries continue to this day, to perpetuate a system put in place by their former colonial master.
How would you describe the balance-sheet of the CFA countries since
their membership of this monetary union?
The CFA franc zone has engendered a long-running debate which continues to raise new arguments among economists. In a general sense, what we should not forget, as we go along, is the privileged relations between
For instance, the foreign reserves of the CFA African states are deposited in the French Treasury, but no African country is capable of telling you exactly how much of this hard-earned foreign reserves belong to them. Only
However, the French authorities have carefully tried to conceal in the African central bank statutes, measures that are sometimes preventative, aimed at avoiding a situation whereby the Operations Accounts become indebted on a permanent basis. Critical matters concerning the operations of the CFA franc are kept top secret and only French Treasury officials are in a position to give the exact amount of money belonging to the CFA zone countries held in the Operations Accounts. Only these French officials can give the level of remuneration as well as the cost of maintaining these accounts. The whole system is shrouded in secrecy; it is opaque and authoritarian.
The CFA zone economies are very vulnerable. The effects caused by the operational mechanism of the CFA franc are asymmetric: The most wasteful countries in the zone are able to use the foreign reserves of other more economically prudent countries. The monetary solidarity of the CFA zone countries benefits the richest of them and encourages the exploitation of the poorest in the zone. The existence of a stable and unified monetary system has not led to the emergence of an efficient and major banking/financial system in the CFA countries. Of the 107 banks within the CFA countries, 42 were declared bankrupt in 1990. The banking networks which were constituted thereafter are strongly dependent on the banks in metropolitan
The CFA zone has been in existence for more than 60 years. How do you explain this long period, despite the negative effects that it continues to produce in the CFA countries?
A: This long period, in my view, is due to the influence of France over the Francophone African countries, although those in favour of the CFA franc use the following arguments to justify their support: monetary guarantee which generates an influx of capital; austerity measures in monetary policy which limit the risks of inflation and maintain an equilibrium in the external balance and credibility of the CFA franc.
However, the CFA proponents pretend not to see the political and financial repression which successive French presidents have exercised over their African counterparts who have tried to leave the CFA zone system. We are witnesses to a number of repressive measures aimed at preventing the growth of any ideas of emancipation from the CFA: the recent crisis relating to uranium in Niger, gold in Mali, petrol in Chad, raw materials and the transfer of public utility shares in Côte d'Ivoire and the crises in Rwanda, DRCongo and Senegal, all to protect French interests.
Instead, they are content to see African states being reduced to the level of taxpayers for
This is a pity because this belief is totally false. The world out there is vast and open; it only requires that one develops a keen desire to integrate into it freely and responsibly through trade and not through foreign aid which has the effect of conditioning the mind and transforming people into beggars. Everyday, globalization creates millions of opportunities which do not profit us because we are trapped in inefficient systems.
A meeting of finance ministers from the CFA zone was held in
No, I never participated in those meetings when I was the minister of finance. But most the CFA countries are practically weak and on a drip. They can therefore not bring their weight to bear on decisions taken during the finance ministers' meetings. It is, therefore, reasonable to wonder why they keep participating in such meetings in which they don't even have an effective voice. These countries are in effect saying they are irresponsible and convinced that
Could you cite at least three major reasons which would justify why African states should break away from the CFA franc?
To begin with, the CFA franc is financially repressive, unfair, and morally indefensible. It has created a zone of state corruption. During elections in
It's these connections that continue to perpetuate French monopoly in the CFA countries, despite the globalization of the market. Under the pretext of assisting poor countries with French tax-payers' money, it is in fact the political class of France and Africa who enrich themselves in an illicit manner and this alone is justification enough to break up and reject the CFA zone system. Economic and financial liberalization cannot happen when there is a fixed exchange rate, and an artificially maintained zone of economic influence. In fact, the emergence of tensions within the international monetary system and the financial crisis of this last few years incline one to think that the choice of the exchange regime is dependent on the type of commitments undertaken by monetary authorities.
And yet, the voluntary limitation of the CFA countries regarding monetary policy freedom has led to increased official worries about a possible devaluation of the CFA franc.
After the break with the CFA franc that you advocate, what monetary future do you propose for the African countries?
Given the stakes involved, the reforms that are called for must be in the financial and monetary spheres. A currency must resolutely be at the service of the economy. It must adapt to the prevailing contexts. To that effect, efforts must be made to enable countries to protect themselves against asymmetric shocks, improve macroeconomic convergence and adjustment as well as to be able to finance their development. t has become vital today for the CFA franc to acquire its own existence, free of colonial stranglehold. It is high time that the African countries assumed the consequences of freely pursuing macroeconomic policy without allowing
After the break, the ex-CFA zone must construct its own system based on simple principles. These include:
* establishing direct access to international markets without having to pass through a tutor (read
* without a monetary guide (read
* establish a simple fiscal system and not complicated tax codes that are incomprehensible; have flexible exchange rates vis-à -vis major currencies.
In order to achieve this, the CFA countries have two options:
* Either they create independent national currencies with flexible parity as was the case with the European Union national currencies before the advent of the euro. This option can only prosper if the banks are free and private, and the central banks independent to put in place credible monetary policies.
* The second option is that African countries can get together and create a unique and common currency with a unique and common central bank for all, independent of politicians and a single economic policy (monetary and budgetary).
Whatever the option that may be adopted by the African countries, the states must be democratic and clearly spell out the ownership rights of their populations, and then allow the people the freedom to decide whether they wish to mortgage these rights. Everything starts with the rights of ownership accorded to the people, rights which would then free people from poverty. After that, free trade will do the rest.
In 2005, you published a book entitled, "Les Servitude du Pacte Colonial” (The Servitude of the Colonial Pact). Could you briefly explain what this book is about and in particular about the message it conveys?
The purpose of the book was to put at the disposal of the public the "colonial pact" which is the foundation on which the Franco-African Cooperation Agreements are built. It's a hereditary model organized by Gaullist France on the eve of the independence of Francophone African states, aimed at indirectly controlling the management of the Francophone countries. The book aims to expose the texts which are used to organize, French state interventions despite the theoretical end of colonialism in the 1960s. According to this Colonial Pact, when Francophone African presidents came to power, die were expected, to manage their countries as though on behalf of
In this book, you will discover that
The true independence of the CFA zone countries has, in reality, been confiscated by