07/09/2020

New Currency, Old Power Play

Blog / By Lisa Ossenbrink and Urooba Jamal

Fire flickered from the matches in the crowd, jostling alongside the young men that had gathered below the steps of one of Benin’s most recognisable landmarks, the Martyrs Square monument, which commemorates victims of a French coup d'état attempt in 1977.

40 years after that attempt, the crowd of young Beninese men had congregated in the West African capital of Cotonou in August 2017 to rid the region of a symbol of its French colonial era: by burning banknotes of the CFA franc, the France-backed currency. They were just one of many groups in West Africa inspired by the actions of the controversial yet influential Franco-Beninese activist Kemi Seba. Seba was among the first on the continent to take to the streets of Dakar, Senegal to burn the very same CFA franc notes just days earlier.

About a decade before, Francisco Perez had wandered the same streets of Dakar, wondering how such a poor country could be so expensive. One day, he recalls, someone said to him: ‘That money you're holding in your pocket? Those are euros’.

The economist from the USA would continue to ponder this moment for years to come.

‘Several years later, when I decided to do a PhD in economics...this is the one question I (wanted) to answer...who does this arrangement serve?’ he said.

Since 1945, eight West African countries have been using the CFA franc, which is pegged to the euro. Half of these countries’ net foreign assets are also stored in France’s national treasury. Political protests against what has been perceived as a colonial tax, like the one in Cotonou in 2017, have taken place for years.

In December 2019, France’s President Emmanuel Macron and Côte d’Ivoire’s President Alassane Ouattara made an announcement that has been deemed historic: the replacement of the CFA franc with a new currency, the eco, which was supposed to come to fruition this year, but has been delayed due to the pandemic.

The question is, why is France agreeing to this change 75 years later? Some speculate the former colonial power may have a vested interest in recasting its image in the region; after years of anti-CFA franc protests, perhaps it was time to concede. Others argue that the conditions of the new eco currency are not that radically different, so France won’t be relinquishing too much.

But there’s yet more explanation. France needs West Africa more than it is willing to admit. By being involved in the creation of the eco, France has both ensured its continued role as a key player in the region, and has acted on its strategic interest in undermining regional integration between Franco and Anglophone West Africa.

France’s power play in its former colonial domain, therefore, is in hopes of securing its waning status as a world power.

Undermining regional integration

How exactly has France lodged itself into the center of this change, especially as the Economic Community of West African States (ECOWAS) has long had plans for a regional currency of the same name? Is this a hijacking of plans? Simply put, France’s involvement appears to be an attempt to undermine regional integration between French and English-speaking West Africa: by excluding Ghana and Nigeria, two of the most influential countries in the region. Nigeria, specifically, is crucial for the region. With a population of 188.7 million and a GDP that accounts for nearly 50% of the whole of West Africa, ECOWAS’s headquarters are located in its capital, Abuja.

‘There’s a long history of France and Nigeria battling for regional hegemony’, Perez affirmed. ‘France has been trying to undermine Nigeria’s attempt to dominate ECOWAS’.

Consequently, Nigeria has not welcomed this development.

‘It gives me an uneasy feeling that the UEMOA Zone wishes to take up the Eco in replacement for its CFA Franc ahead of other ECOWAS Member States’, Nigerian President Muhammadu Buhari said in late June, referring to the West African Monetary and Economic Union, known by its French acronym, UEMOA.

Ghana, on the other hand, has expressed interest in joining the proposed eco currency, although it has voiced staunch opposition to the euro peg, likely owing to the colonial connotation. In fact, Ghana had been interested in joining the CFA franc before, explained Perez, despite it never having been under French authority. According to Ghanaian economist E. K. Bensah, the Executive Director of the Africa Continental Free Trade Area Policy Network, Ghana’s position on these regional currencies stems from its greater desire for ECOWAS integration, whatever the initiative. Nigeria, however, has been a stickler of ECOWAS’s own integration plans.

While Nigeria is disappointed with what they see as France’s hijacking of the eco, they hadn’t yet gone forward with it themselves. Their major concern about a single currency for the region was the possibility of having to bail out weaker economies, such as the Gambia, if they experienced shortcomings. This responsibility would strain Nigeria’s own economy.

According to the former economic advisor to the President of Mali, Modibo Mao, ECOWAS has always had regional integration as its main objective, with a monetary union characterising ‘the last state of regional or economic integration’.

In the development of the new currency, he continued, the biggest hindrance continually remaining was the question of Nigeria’s leadership.

‘You cannot have a common currency without having Nigeria in the lead’, pressed Mao, adding that, ‘If you want to have monetary integration and have a common currency like you've had in Europe, you need to have economies that converge’.

This touches upon the essential question of solidarity within such a monetary union. There is a strong parallel here with the ongoing discussion about this in the EU: what are the limits of the solidarity of northern European countries with southern Europe?

In West Africa, the Francophone UEMOA bloc is more advanced in their economic integration, when compared to Anglophone West Africa, or ECOWAS as a whole, explained Bensah.

‘ECOWAS has had to play catch up and even learn from UEMOA’, he said, explaining that for this reason there has been collaboration between the two blocks.

The key difference in economic policy between Anglo and Francophone West Africa, Bensah explained, is that the CFA franc’s peg to the euro has afforded the countries who use them a level of stability. By contrast, the currencies in Anglophone countries, he continued, have been affected by shocks such as oil prices and inflation rates. Countries such as the Gambia, Sierra Leone and Liberia have also had to deal with factors such as civil wars and the Ebola crisis in recent decades.

Despite these differences, Bensah sees continued opportunity for the region to work together as a whole, ‘in a way that is conducive to both of their own interests, but ... always ... at the fulfillment of the objectives of West Africa's economic integration’.

And while the CFA franc has afforded stability to UEMOA countries, the high and fixed exchange rate between it and the euro and dollar, has made foreign direct investment (FDI) in the UEMOA zone expensive. Consequently, Ghana and Nigeria have attracted much more FDI than UEMOA countries.

This is how, Bensah affirmed, Ghana and Nigeria ‘are the heavyweights of ECOWAS integration’.

Still, he explained, West Africa’s linguistic divide has also been evident in the economic realm.

‘There's the West Africa that continues to enjoy support and attention and FDI from the UK and their counterparts’, he said. ‘And then there's the West Africa, the Francophone Africa ... that enjoys attention and support from ... France’.

Even while Ghana has some relationship with France, said Bensah, ‘it clearly is not the same as the level of investment ... as in Cote d'Ivoire, our next door neighbor’.

Concurrently, he continued, ‘The French are not so keen on investment in Nigeria...and the Nigerians are quite forthright in their relationship with France: they would rather deal with the UK or the US’.

Language and identity as power

With France experiencing a decline of its influence on the world stage, the French grip on West Africa is tightening, in what appears to be a desperate attempt to cling onto influence that is fleeting.

‘West Africa is really vital to France’, said Aminu Bappa, an advocate from Nigeria who supports the end of the CFA franc. According to him, the French are agreeing to the currency change not to foster a better relationship with its former colonies, but rather to further entrench their influence there.

‘Call it hijacking, call it stealing, call it exploitation’, he says instead of France’s move in the region.

For Perez, French interest in West Africa is a question of power wielded through language and identity. It is only in this part of the world that the French can exert this kind of power and influence through the export of their culture.

‘There’s nowhere else where France can do this’, pressed Perez.

‘The French are very much attached to the idea (of) French (being) a world language’, he added.

Macron on several occasions has been explicit about this, especially when addressing Africans.

‘To refuse the French language in order to make English fashionable on the African continent is to be blind to the future’, he said during a 2017 trip to Burkina Faso. ‘If we go about it right, France will be the first language in Africa – and maybe even the world – in the coming decades’. He went farther, declaring in the same speech that French ‘is no longer solely French but also, maybe even more so, African’.

Macron and the new French soft power strategy

This strategy is part of France’s soft power efforts, which has ramped up in recent years. In fact, it’s currently the world leader in soft power, according to the Soft Power Index, which looks at countries’ non-military influence worldwide. That report tauts France’s unmatched membership in multilateral and international organisations, the fact that it has the highest number of diplomatic cultural missions globally, as well as the largest number of tourist arrivals in the world.

France first topped this chart in 2017, in fact, when Macron came to power with his centrist agenda that elbowed out both the country’s main right and left parties to achieve victory. To that end, the 2019 index report lauded Macron’s leadership specifically: in his role in the G7, in easing tensions between the US and Iran, and in his push for action on climate change issues.

And while all French presidents in recent years have made some nod at rectifying France-Africa relations, Macron has diven nose-first with this claim. ‘The future of the world will largely be played out in Africa’, he said in his first-ever address to France’s 170 ambassadors in August 2017. He also created the first-ever Presidential Council for Africa, which includes a cadre of experts who advise him on African issues and help him prepare for his visits to the continent. Additionally, he has bankrolled a number of development initiatives in Africa. Quite crucially, his emphasis on promoting the French language, outlined earlier, fits in with these soft power strategies as well.

France’s involvement in the replacement of the CFA franc with the eco is part and parcel of this soft power strategy: while the substance of the new currency will not change too much, it gives France and Macron credit for a long-awaited demand, in tune with Macron’s centrist politics.

‘Macron is trying to do his best at...keeping (the eco) as a simple rebrand,” said Perez. “It ties into his role in French politics, which is to sell the same ... warmed over neoliberal(ism)... but in new packaging’.

Perez explained that the current reforms hardly match a French proposal from the past, particularly one by Jean-Pierre Cot, France’s Minister of Cooperation from 1981 to 1982, during François Mitterrand’s Socialist Party presidency.

‘He actually made serious proposals to reform the CFA...way more serious than what we’re talking about right now’, he said. ‘They were talking about either creating new separate national currencies or creating a regional ... unit of account, while creating separate currencies that were tied to that … (and also) possibly even getting rid of the peg’.

‘At that point, the president of Gabon and Cote d'Ivoire called up Mitterrand and said, “This is unacceptable,”’ Perez explained farther. ‘And he was basically thrown out by a conservative lobby of African presidents and French businessmen and other groups that had...a vested interest in the CFA’.

The contrast from this episode to the CFA franc’s much shallower reforms today under Macron underscore France’s desire to be recognized as a world power, which it wields through soft power tactics that appear to concede more than they actually do, in line with Macron’s centrist approach to politics.

French military presence in the region

France also pursues its great power identity in relation to West Africa by building its military presence there. In December 2019, there were more than 4500 French troops in the region, the country’s largest oversea operation. As of August 2020, that number has grown to 5100 troops.

Perez recounted witnessing this presence in Cote d’Ivoire.

‘If you fly into Abidjan ... there's a large French airbase right next to the airport’, he said. ‘So you enter the airport and ... you're surrounded by French soldiers. It's a very powerful kind of symbolic image’.

‘This is about trying to maintain a vision of French grandeur and pretend like they’re still a world power’, he continued, adding that the region has seen protests against what is perceived as military occupation.

France’s buildup of its military presence is also an affront to U.S. military presence there as well, where the two have often clashed.

African resistance

France’s tactics have not been without pushback. For Bappa, while the reform is welcomed, it’s part of a grander vision that usurps France’s influence in the region entirely. He sees the new eco currency as an important step in creating a continent-wide currency.

‘Before we can achieve the Afro’, the name of the pan-African currency, he explained, ‘We must all use a shared currency in our small subregions’.

For this reason, Bappa is at least one passionate advocate for the new eco currency featuring the face of Thomas Sankara, the Marxist revolutionary and pan-Africanist who was the former President of Burkina Faso.

‘Thomas Sankara is the best thing that has ever happened to West Africa’, he pressed.

Perez’s hope for the eco currency is that it sparks a greater debate about France’s involvement in West Africa, and that it leads to a sovereign African monetary project that would foster greater economic development.

For Mao, if Africa is to be sovereign, it must act as such. His takeaway is simple: ‘It is time for Africa to focus on African interests’.

Urooba Jamal is a Canadian journalist who writes about global social and political issues. She is pursuing a Master’s degree in Journalism, Media, and Globalization, studying in Europe as a Mundus Journalism scholar. She previously reported on Latin American news and issues from Ecuador. You can follow her on Twitter at @uroobajamal.  

Lisa Ossenbrink is a freelance journalist who likes to write about power and populism. Regionally, her work focuses on Europe, Sub-Saharan Africa and international relations between the two. Currently, she's pursuing the Erasmus Mundus Master in Journalism, Media and Globalisation in her second year at University of Amsterdam.