Eurozone membership merged CFA extraction with neoliberal austerity, worsening African prospects.

Evidence

The fact that the CFA franc’s parity was set at an artificially high level, as we saw in Chapter 1, penalised African products: they were hard to sell on world markets, except in the context of the commercial preferences granted by the metropole. Conversely, the high external value of the CFA franc favoured imports, especially from the metropole. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 128 (#expands, via linked claim)

Even in this case, however, so long as the loans are destined for productive investment such fears are unwarranted. Many African countries import large quantities of food products, which take up a large amount of their foreign reserves. But they could take steps to produce locally the food that they need: land, work and know-how are generally available. What is missing, more often than not, is the financial means to develop their agricultural systems, as well as trade protection against foreign imports. If they financed the development of their agriculture, they wouldn’t reduce their foreign exchange reserves; on the contrary, they would save money! Unfortunately, the CFA system prevents any policy aimed at the mobilisation of domestic resources: the limits imposed on money creation discourage economic activity and therefore the formation of substantial national savings; while the free movement of capital favours the outflow of national savings and the repatriation of corporate profits, which companies are not obliged to reinvest in the local economy. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 145 (#expands, via linked claim)

Categorization

• XREF: connects to: Financing local food production would save rather than deplete African foreign reserves; African economists warned that fixed euro pegging would exclude African economies from global competition; The CFA franc functions as a political instrument of pressure over 15 African states. (+4 more)

Related

• African economists warned that fixed euro pegging would exclude African economies from global competition (similarity 0.90)
• The same strong euro that hurts France devastates African export competitiveness (similarity 0.88)
• The CFA system blocks African countries from financing their own agricultural development (similarity 0.88)
• The CFA franc was a political choice that deprived non-adapting African actors of credit (similarity 0.87)
• Euro pegging diverts trade toward France and blocks local industrialization. (similarity 0.87)
• An overvalued CFA franc penalised African exports while favouring imports from France (similarity 0.86)
• The CFA franc structurally denied credit to economic actors outside colonial accumulation (similarity 0.86)
• CFA convertibility guarantee is cheap only because African economies stay small. (similarity 0.86)
• The CFA franc’s parity was set without regard for local economic realities (similarity 0.86)
• The CFA franc was a colonial instrument depriving African actors of credit. (similarity 0.85)
• Euro appreciation deteriorates franc zone trade balances (similarity 0.85)
• France’s strong-franc policy worsened CFA countries’ competitiveness (similarity 0.85)
• Franc-zone bank credit allocation suppressed African firms competing with French companies (similarity 0.85)
• Franc-zone central banks must restrict domestic credit to defend the fixed euro parity (similarity 0.85)
• Free trade agreements would doubly penalize franc zone producers. (similarity 0.85)

Broader Connections

• An overvalued CFA franc penalised African exports while favouring imports from France #expands (0.60) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 128
• France’s strong-franc policy worsened CFA countries’ competitiveness #expands (0.60)
• Franc-zone bank credit allocation suppressed African firms competing with French companies #expands (0.55) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 128
• The CFA system blocks African countries from financing their own agricultural development #expands (0.55) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 145