Economic development in Sub Saharan African countries, i.e. the Francophone zone is totally handicapped by the euro linked currency (CFA franc). The long term Over-indebtedness is such that the currency area is not competitive. Should governments force a collapse of the CFA franc zone for the adoption of national currencies?
Devaluation and exchange rate flexibility
Should the union’s members rather negotiate new provisions for the start of a common economic development namely the devaluation and flexible exchange rate structure? In any case the debt vis-à-vis donors will become a problem almost unsustainable but the completion point of the Heavily Indebted Poor Countries (HIPC) may help since part of the current debt will be cancelled. The franc CFA zone may return to competition after a few years.
Viability of a monetary union relative to the Euro Zone
Is a monetary union viable without a common fiscal policy? This question seems to be of crucial importance with regards to the euro zone debt crisis. Unlike the USA which is a state with one government and a single fiscal policy, a single currency a la Euro is definitely designed to benefit only to strong governments in the union. In the euro zone, Germany and France seems to be the winners while Portugal, Italy, Greece and Spain are set to keep the bottom in terms of competitiveness. The same scenario is likely in the Franc CFA zone where Ivory Coast, Senegal, Cameroon and Gabon will get stronger over the rest of the group. Our goal here is to develop arguments that support the option of monetary sovereignty in Francophone Africa, we believe that this option should be negotiated between the Franc CFA zone, the EU and particularly the France.
About us Danon Gohou
Danon Gohou, born in Ivory Coast, I am married with two children. I am PhD Student in economics in the UK. I am interested in Financial Econometrics in particularly in STAR, VAR models and R programming.
Monetary policy in Africa and Euro area
“I use the web to express my point of view on policy in general and particularly on situation of the savings of the franc area CFA which lack competitiveness cruelly. I consider that the Franc CFA in the actual comprehension does not participate in the economic development of the region and that a negotiation is obvious with France for a recadrage of monetary policy for Africa.”
