AU reforms should consider a sovereign monetary policy

The African Union has embarked on reforms aiming at enhancing the institution’s efficiency and effectiveness, in order to adequately respond to the emerging global challenges while preserving the Pan-African ideals of shared identity, sovereignty, dignity and prosperity.

The African Union has embarked on reforms aiming at enhancing the institution’s efficiency and effectiveness, in order to adequately respond to the emerging global challenges while preserving the Pan-African ideals of shared identity, sovereignty, dignity and prosperity.

In his inaugural speech last month, President Paul Kagame – who will head the African Union Summit next year – urged all Africans, as brothers and sisters, to work together more closely, adding that, “the governance and prosperity of Africa cannot be outsourced.”

Following her colonization and subsequent independence, Africa has been either divided or aligned with her former colonial masters’ languages or culture.

Effects and residues of colonialism are still in existence on the continent, including national currencies and monetary policies which are decided in European capital cities, either Brussels or Paris.

Either we agree or not, but there is a lot of evidence to attest to this. For instance, there are some African French speaking countries, which are still using the Franc CFA.

Originally, the “Franc CFA”, which was created by the French General De Gaulle on 26 December 1945, was an acronym for “Franc of the African French Colonies” (Franc des colonies Françaises d’Afrique)”, which later changed to “Franc of the African Financial Community” or “Franc of the Financial Cooperation in Africa”.

Despite their formal independence, the Franc CFA is still widely used as local currency in the following countries: Benin, Burkina Faso, Ivory Coast, Guinea Bissau, Mali, Niger, Senegal, Togo, Cameroun, Congo, Gabon, Equatorial Guinea, Central Africa Republic and Chad.

Experts have persistently criticised the Franc CFA for making economic planning for the concerned countries in Africa all but impossible since the CFA’s value is pegged to the Euro and the macroeconomic stability depends on the French monetary policy.

Their bank notes and coins are made by the “Banque de France” (France’s Central Bank) located in the suburbs of Clermont-Ferrand.

This situation does not make them really economically independent. Not only are such countries not free to decide independently on their monetary policy, but they also pay commissions to the Bank of France.  

Such a situation inevitably benefits more the French than the African States and it promotes imports from Eurozone countries rather than exports from African countries.

Despite all the above, in July 2017, during the G5 Summit held in Bamako, Mali, the French President Emmanuel Macron urged all African leaders who are not happy with the Franc CFA, to quit and create their own currency.

Africans should forge their own way of doing business and to emancipate themselves economically. Challenges can be transformed into opportunities.

Fortunately, there are youth movements and individuals such Kemi Seba, in the Western Africa who have started protesting against the use of Franc CFA in their countries.

Some of them have taken extremist route by burning the current bank notes.

Though such practices are likely to kill their economies, it is a call for the leaders to consider how effective the current African monetary policy is.

This problem should not be left to few African countries, if we are to promote South to South trade and investments.

Monetary policy sovereignty is critical to liberation and prosperity, and Africa is no difference. We all have to stand and fight for Africa’s dignity.

Prosperity is a result of the vision by leaders, unity of purpose and resilience of the people. When shall we put an end to the French monetary imperialism in Africa?
 
The writer is a political analyst and member of PanAfrican Movement, Rwanda Chapter.

Twitter @NLadislas

 

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