Franc zone growth mostly reflects multinational activity, not local productive capacity

Evidence

Analysing these figures, we can see that Equatorial Guinea and Congo, the main oil producers, are the two African champions in terms of net transfers of income to the rest of the world. In the 2000–09 period, these amounted to approximately –43 per cent of GDP for Equatorial Guinea and –30 per cent of GDP for Congo. In short: the profits that the oil multinationals in Equatorial Guinea brought out of the country represented almost half of the wealth produced by the country each year. In the case of Congo, net income payments (consisting mainly of repatriation of profits and interest on the debt) represented almost a third (–30 per cent) of GDP. Although these impressive percentages in the 2001–16 period fell to –34.1 and –17 per cent respectively for Equatorial Guinea and Congo, they remain well above the levels observed in the vast majority of African countries. Also Gabon has recorded an important volume of net transfers of income from 1970 to today (between –7.4 and –12.6 per cent on average per year), as well as Cameroon between 1970 and 2000 (between –5 and –11.6 per cent on average per year) and the Ivory Coast between 1980 and 2010 (between –7.8 and –9.4 per cent on average per year). This data allows us to understand how economic growth in the franc zone, rather than increasing local productive capacities, reflects the growth of the local activity of multinationals. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 315

Categorization

• XREF: connects to: Franc zone growth is uneven and often strongly negative; Franc zone growth falls below the sub-Saharan average.; Franc zone economies have stagnated since independence, with most growing under 1 percent yearly — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 281 (+3 more)

Related

• Franc zone economies have stagnated since independence, with most growing under 1 percent yearly (similarity 0.87)
• Franc zone growth is uneven and often strongly negative (similarity 0.86)
• Recent franc zone growth only recovers past peaks, not net progress (similarity 0.85)
• Franc zone growth falls below the sub-Saharan average. (similarity 0.83)
• Seventy years in, franc zone states still export unprocessed raw materials to Europe (similarity 0.79)
• The CFA system only works while franc-zone economies stay small (similarity 0.79)

Broader Connections

• Franc-zone bank credit allocation suppressed African firms competing with French companies #expands (0.50) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 128