Towards monetary autonomy in the French Union? The 1949 reform in French Somaliland and the façade of sovereignty

Moustapha Aman
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Moustapha Aman: ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - Université Gustave Eiffel, LEFMI - Laboratoire d’Économie, Finance, Management et Innovation - UR UPJV 4286 - UPJV - Université de Picardie Jules Verne

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Abstract: This article examines the 1949 monetary reform in French Somaliland, when the French government replaced the colonial franc with a currency board pegged to the US dollar – breaking with the franc zone but without granting autonomy. Triggered by the collapse of the French franc and distrust of a colonial currency ill suited to regional trade, the reform imposed external stability through a top-down mechanism lacking legitimacy. Drawing on unpublished archives from the French Ministry of Finance (SAEF) and using the Mundell-Fleming trilemma as an analytical lens, the article shows how French authorities prioritized exchange rate stability and capital mobility over monetary autonomy. Far from a step towards sovereignty, the reform reaffirmed imperial interests under the façade of technical modernization. Three concerns motivated this decision: the discrediting of the colonial franc, Ethiopia's demand for settlement mechanisms, and France's strategic imperative to maintain a foothold in the Horn of Africa. The resulting arrangement created ‘stability without sovereignty', a structured dependency that was monetary (via a rigid dollar peg), institutional (under French Treasury oversight), and commercial (through interdependence with Ethiopia). The 1949 reform thus exemplifies how a currency board transformed colonial dependence into a tool of economic and geopolitical engineering, prefiguring postcolonial monetary logics.

Keywords: postwar stabilization; dependency; monetary sovereignty; currency board; French Somaliland (search for similar items in EconPapers)
Date: 2025-10-27
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Published in Economic History of Developing Regions, 2025, 40 (3), pp.259-278. ⟨10.1080/20780389.2025.2568429⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05368560

DOI: 10.1080/20780389.2025.2568429

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