French loans to Cameroon were tied and never denominated in CFA francs

Evidence

France is also the country that provided the largest funding to Cameroon between 1975 and 1998, granting the country 253 loans worth 5,035 million, much more than Germany, the second bilateral lender (86 loans for a total of 2,166 million), according to the ECA. These loans were mostly ‘tied’, meaning that they involved a counterpart: in exchange for the loans, Cameroon had to procure goods and services from France. As a result, France became Cameroon’s largest creditor but also its main supplier. Some other data reported by the ECA: French loans have never been denominated in CFA francs, although the latter is ‘the natural extension of the French currency in Cameroon’, but rather in French francs (at the time) or in dollars. For this reason, the Cameroonian debt contracted with Paris – meaning the value of its outstanding debt – increased as a result of the 1994 devaluation. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 253

Categorization

• XREF: The 1994 devaluation increasing Fran-denominated debt connects to the earlier chapter’s treatment of the devaluation’s effects. — connects to: Tied French loans made France Cameroon’s largest creditor and supplier; African operations-account credits function as preferential loans to France — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 251; An overvalued CFA franc penalised African exports while favouring imports from France — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 128 (+3 more)

Related

• Tied French loans made France Cameroon’s largest creditor and supplier (similarity 0.95)
• France’s guarantee is backed by pooled African reserves and French central bank seats (similarity 0.85)
• The 1994 devaluation tripled French financial advantages while shifting blame to the IMF. (similarity 0.84)
• The 1994 devaluation capped decades of Paris refusing to adjust the overvalued CFA franc (similarity 0.84)
• CFA francs are non-convertible among the three African franc-zone sub-units (similarity 0.84)
• The CFA franc’s real purpose was draining colonial wealth to France. (similarity 0.84)
• France avoided needing dollars to buy from CFA-zone countries. (similarity 0.84)
• The CFA franc’s parity was set without regard for local economic realities (similarity 0.84)
• The devaluation doubled France’s financial capacity in CFA francs overnight. (similarity 0.84)
• African franc-zone reserves effectively grant France subsidized loans below market rates. (similarity 0.83)
• The French guarantee of the CFA franc was illusory since African reserves exceeded debts (similarity 0.83)
• The CFA guarantee arrangement secretly benefits France at Africa’s expense (similarity 0.83)
• Unlimited CFA convertibility is guaranteed by the French Treasury lending as needed (similarity 0.83)
• The CFA franc was deliberately overvalued against the metropolitan franc. (similarity 0.83)
• The CFA franc was a political choice that deprived non-adapting African actors of credit (similarity 0.83)

Broader Connections

• French Treasury guarantees unlimited convertibility by lending money to franc zone central banks #corroborates (0.60) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 99
• Franc-zone bank credit allocation suppressed African firms competing with French companies #corroborates (0.55) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 128
• An overvalued CFA franc penalised African exports while favouring imports from France #corroborates (0.50) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 128
• France rebranded the CFA franc to undermine ECOWAS monetary integration #corroborates (0.50)