Der Euro, ein Segen für Afrika? Folgen der Anbindung der afrikanischen Franc-Zone an den Euro

The Euro, a blessing for Africa? Consequences of the peg of the African Franc CFA to the Euro

Dirk Kohnert

MPRA Paper from University Library of Munich, Germany

Abstract: About five decades the Franc CFA-Zone in Western and Central Africa was praised as incarnation of economic and political stability in Africa, backed by France. But free convertibility and fixed parity, guaranteed by the French Treasury, mainly served the interest of a small elite of the Messieurs Afrique, both in France and in Africa. Generations of French entrepreneurs and of their African counterparts maintained a profitable self-service shop on expense of the African poor and the French taxpayer. In the aftermath of the devaluation of the Franc CFA in 1994, and of the peg of the currency to the Euro in 1998, the socio-economic divide between rich and poor, urban and rural regions, the formal and the informal sector even widened. However, the perpetuation of the established monetary structure of the CFA-Zone became increasingly anachronistic. As far as the political stability, previously guaranteed by the neo-colonial French Africa policy, becomes obsolete, the base for economic stability of the traditional arrangement of the currency union is threatened as well. The more so, as the CFA-Zone never fulfilled the most crucial preconditions of an optimal currency area. The peg to the EMU, orientated at the interests of highly industrialized European countries, led to an overvaluation of the real exchange rate of the CFA, and will increasingly constitute an obstacle to sustainable indigenous development in francophone Africa.

Keywords: Monetary Union; regional integration; Optimum Currency Areas; Franc CFA-Zone; Francophone Africa; Euro; EMU (search for similar items in EconPapers)
JEL-codes: E42 E52 F15 F31 F33 F35 F36 F54 (search for similar items in EconPapers)
Date: 1998, Revised 2007
New Economics Papers: this item is included in nep-afr, nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Afrika-Jahrbuch 1997 (1998): pp. 59-70

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