Last week, I published an opinion in this newspaper, in which I suggested that reforms by the African Union should consider a sovereign monetary policy for Africa’s prosperity.
The article generated a rather healthy debate on social media and other platforms on losses and benefits from Franc CFA from or to whichever side between Africa and France.
I believe that all is not bad with Franc CFA in Africa, because at least it has allowed some African countries to transact their business, though at a slow pace.
However, Africa does not need a snail’s pace in its road to self-reliance and prosperity.
My take is that the Franc CFA, which has been imposed on over a dozen African countries, has been benefiting more the French than Africans themselves and hindering their trade and investments aspirations or potential.
When French President Emmanuel Macron urged African Heads of State to quit the Franc CFA zone and to create their own indigenous currency that fits their economies, ill-informed persons took it for fact and thought he actually meant it.
The reality proves otherwise.
France cannot be happy with Africa abandoning the Franc CFA. There are many factors to attest to this: Franc CFA benefits more the French than Africans.
Franc CFA is still a colonial tool rather than a developmental aspect for the “independent” African states because it allows the colonial masters to stay in full control of the economies in the colonised countries.
Let’s analyse this situation with concrete examples.
The Franc CFA member states are required to deposit 50% of their foreign exchange reserves into the French Treasury every year. In return, the Bank of France can guarantee the Franc CFA.
In 2014, Franc CFA deposits from Africa into the Bank of France amounted to 14.3 billion Euros, which was more than the then Chad’s annual GDP, and half the GDP of Cameroon.
In such a situation and under the current frameworks, African countries don’t have access to “their” deposits in France.
If you take the above African deposits in Bank of France, and you lend them to a commercial bank for a period of two years at an annual interest rate of four per cent, you can easily earn more than eight hundred million Euros in profits in two years.
This is far beyond both “aid” and “loan” those countries can get from France over the same period.
In addition, the Bank of France has veto power over the Franc CFA monetary policy, which means that those countries are economically handcuffed because they have surrendered both their money and monetary sovereignty.
The above evidence fuels the talk of “French monetary imperialism in Africa” which should end.
In a separate situation, Africa produces 70 per cent of the world’s cocoa beans but no chocolate is produced from Africa.
West Africa produces approximately two-thirds of the world’s cocoa beans, and nearly 45 per cent of that cocoa bean production is sourced from the Ivory Coast, one of the countries in the CFA Zone.
Four of the top five countries producing cocoa beans are from Africa. Those countries are; Ivory Coast, Ghana, Indonesia (Asian), Nigeria and Cameroon, respectively.
And countries that produce most chocolates in the world are in the Western world.
From chocolate sales, the United States alone makes over $20 billion, Germany makes $1 billon, Switzerland $14bn, and Belgium $12 billion annually.
Switzerland is the principal chocolate manufacturer and its production is a primary source of wealth for the country.
Can Africa start processing cocoa beans and produce chocolate from within? I believe it is possible. Maximising national potential is the only way to sustainable development.
Different African countries are struggling to promote local manufacturing in order to maximise their potential for the good of their citizens and global partners, and Rwanda is no exception.
Efforts by the Government of Rwanda to promote local manufacturing industry and value addition to empower citizens and boost domestic economy should not be penalised but supported in the interest of achieving some of the Sustainable Development Goals, which the international community subscribed to.
The ideal of putting an end to caguwa or promotion of “Made in Rwanda” is not against free markets. It is a justified cause, which global partners should support if they really want to be Africa’s development partners.
In addition to security and good governance, as President Paul Kagame said, Africa needs visionary leaders who can promote local industries, develop policies which can fit them, promote South to South trade and investments that can contribute to total liberation of Africa and a critical mass of an informed citizenry ready to fight to own their destiny.
The writer is a Political Analyst and Member of the PanAfrican Movement, Rwanda Chapter