The CFA system blocks African countries from financing their own agricultural development

Evidence

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

Categorization

• XREF: connects to: Financing local food production would save rather than deplete African foreign reserves; The CFA franc structurally denied credit to economic actors outside colonial accumulation; CFA convertibility guarantee is cheap only because African economies stay small. (+9 more)

Related

• Financing local food production would save rather than deplete African foreign reserves (similarity 0.90)
• CFA convertibility guarantee is cheap only because African economies stay small. (similarity 0.90)
• The CFA franc was a political choice that deprived non-adapting African actors of credit (similarity 0.89)
• The CFA franc structurally denied credit to economic actors outside colonial accumulation (similarity 0.89)
• The CFA franc was a colonial instrument depriving African actors of credit. (similarity 0.88)
• Eurozone membership merged CFA extraction with neoliberal austerity, worsening African prospects. (similarity 0.88)
• Franc-zone bank credit allocation suppressed African firms competing with French companies (similarity 0.87)
• African deputies publicly exposed the CFA franc as a tool of the colonial pact (similarity 0.86)
• The French guarantee of the CFA franc was illusory since African reserves exceeded debts (similarity 0.85)
• The CFA guarantee arrangement secretly benefits France at Africa’s expense (similarity 0.85)
• The CFA system only works while franc-zone economies stay small (similarity 0.85)
• The CFA franc’s real purpose was draining colonial wealth to France. (similarity 0.84)
• The CFA central banks subordinate domestic credit to defending the euro parity. (similarity 0.83)
• CFA franc’s real aims were draining colonial wealth into France, not African progress. (similarity 0.83)
• France’s guarantee is backed by pooled African reserves and French central bank seats (similarity 0.83)

Broader Connections

• The CFA franc was a political choice that deprived non-adapting African actors of credit #expands (0.70) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 192
• France granted African states nominal monetary rights while denying them in practice #expands (0.65)
• The franc zone prohibited member states from negotiating trade independently #expands (0.50)
• The CFA guarantee arrangement secretly benefits France at Africa’s expense #complicates (0.40) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 146