France's continued control of African economies through the CFA franc is a contentious issue rooted in its colonial legacy.

While supporters argue the currency provides stability and low inflation, critics contend it is a neocolonial tool that restricts the monetary sovereignty of African nations, hinders their development, and primarily serves French economic interests.

The CFA Franc: A Relic of Colonialism

The CFA franc was created by France in 1945 for its African colonies to facilitate trade and maintain economic ties. The acronym originally stood for "Franc of the French Colonies in Africa." After independence in the 1960s, the name was changed to "Franc of the African Financial Community" for the West African states and "Franc of Financial Cooperation in Central Africa" for the Central African states, but the fundamental structure remained.

The CFA franc is used by 14 countries in two distinct monetary unions: the West African Economic and Monetary Union (WAEMU) and the Central African Economic and Monetary Community (CEMAC). The two currencies, while having the same value, are not interchangeable. The system is governed by a series of agreements that have historically been criticized for three key principles:

1. Fixed Exchange Rate: The CFA franc has been pegged to the French franc and, since 1999, the Euro. This fixed parity is seen as a double-edged sword. While it provides stability and helps to control inflation, critics argue it makes it difficult for CFA zone countries to use their exchange rate as a tool for economic growth. Because the currency is often overvalued relative to the productive capacity of these economies, it makes imports cheaper but exports more expensive, thus hindering the development of local industries and promoting a reliance on foreign goods. This system perpetuates a colonial-era trade dynamic where African nations export raw materials and import finished products.

2. Centralization of Reserves: Until a recent reform for the West African union, member countries were required to deposit a significant portion of their foreign exchange reserves (50% or more) in an "operations account" with the French Treasury. This practice has been one of the most contentious aspects of the CFA franc system. Critics argue that this arrangement effectively gives France control over a substantial amount of African wealth, which is then used to finance French budget deficits or investments, with African nations earning little to no interest on their own money. For many, this is the most blatant example of neocolonial financial exploitation. In 2019, an agreement was reached to end this requirement for the West African CFA franc, but it remains in place for the Central African CFA franc.

3. Governance and Veto Power: France has historically maintained a significant presence on the boards of the two African central banks (BCEAO and BEAC), often holding veto power over major monetary policy decisions. This arrangement means that even though the central banks are technically independent, the ultimate decisions about monetary policy are heavily influenced, if not controlled, by a foreign power. Critics argue that this lack of monetary sovereignty prevents African nations from implementing policies that would directly benefit their economies, such as devaluing the currency to boost exports or printing money for public spending during a crisis. The 2019 reform also addressed this, with France withdrawing from the governance bodies of the West African central bank.

The Debate: Stability vs. Sovereignty

The debate over the CFA franc is complex, with valid arguments on both sides.

Arguments in favor of the CFA franc system often highlight its role in providing macroeconomic stability. They point to the fact that CFA countries generally have lower inflation rates and less volatile currencies than their non-CFA neighbors. This stability, they argue, attracts foreign investment, facilitates international trade, and prevents the kind of monetary chaos seen in countries with less stable currencies. The peg to the euro is also seen as a guarantee against speculative attacks on the currency, providing a level of predictability that is crucial for long-term planning. Proponents also argue that the centralization of reserves with the French Treasury provides a "French guarantee" of convertibility, meaning that in a financial crisis, France would step in to ensure the CFA franc could still be exchanged for euros.

Arguments against, however, contend that the supposed benefits of stability come at too high a cost. They argue that the stability is a "sterile" one that has not translated into meaningful economic development. The overvalued currency makes locally produced goods uncompetitive both at home and abroad, hindering industrialization. They also point to the fact that many non-CFA African countries, like Ghana and Nigeria, have achieved higher rates of economic growth and have attracted more foreign direct investment despite their more volatile currencies. Critics also argue that the "French guarantee" is a myth, as France’s primary concern is to ensure the system’s stability for its own economic benefit, not for the sake of African development.

Furthermore, the system is viewed as a key pillar of "Françafrique," a term used to describe France's continued, often opaque, political and economic influence over its former African colonies. The CFA franc is not just an economic tool; it's a political one that ensures French companies have a protected market, and that African leaders remain loyal to Paris. The recent coups in the Sahel region (Mali, Burkina Faso, Niger) have brought this anti-French sentiment to the forefront, with protestors explicitly calling for the end of the CFA franc as a symbol of French control.

Recent Reforms and The Road Ahead

In 2019, after decades of growing criticism, French President Emmanuel Macron and West African leaders announced a major reform of the West African CFA franc. The currency’s name is to be changed to the Eco, the requirement to deposit reserves in the French Treasury has been abolished, and France's representation on the BCEAO's governance bodies has been reduced.

However, critics are skeptical, arguing that the reforms are largely symbolic. The most crucial part of the system—the fixed peg to the euro—remains in place, meaning the African central banks still lack genuine monetary sovereignty. The debate continues, but the fact that these reforms were made at all demonstrates the growing pressure from within Africa to reclaim full economic and monetary independence. The CFA franc remains a powerful reminder of how colonial structures can persist long after the flags of empire have been lowered.