The wealth of African countries plundered by France via the CFA Franc monetary system? This is what Italian Prime Minister Giorgia Meloni said in a 2019 interview. According to her, France "exploits the resources" of the 14 countries using this currency and asks that "50%" of their exports "end up in the coffers of the French Treasury". This is false: the figure of 50% actually refers to the stability mechanism of the exchange rate of the CFA Franc. Until 2019, these countries were obliged to pay 50% of their foreign exchange reserves to the French Treasury, as three specialists explained to AFP. This obligation, much criticized in recent years, was also officially abolished for the eight West African countries in 2020 following reforms to the CFA Franc. This excerpt, which resurfaced in mid-November on several platforms such as TikTok and Twitter after new Franco-Italian tensions over the migration crisis, now has several million views.
The CFA franc, a tool for the spoliation of African wealth by France? In the midst of Franco-Italian tensions over the migration crisis in the Mediterranean, an interview with current Prime Minister Giorgia Meloni, in which she denounces the CFA Franc as a "colonial currency", resurfaced online in mid-November.
Seen hundreds of thousands of times on Tiktok and accumulating thousands of shares and millions of views on Twitter in French as in English, Italian or Spanish, this video extract takes up an argument hostile to France. For Giorgia Meloni, France, which prints the currency for the 14 African countries of the Franc zone (not counting the Comoros), would apply a "seigneuriage, under which it exploits the resources" of these States.
In this January 2019 interview from the Italian program "Non è l'Arena", the then deputy of the far-right Fratelli d'Italia party accuses Paris of having set up a system in which France would print the CFA Franc in exchange for an obligation for these countries "that 50%" of their exports end up "in the coffers of the French Treasury".
Showing the camera a photo of a child working in a mine in Burkina Faso, she said: "The gold that this child extracts ends up almost entirely in the coffers of the French state". An exploitation which in his eyes would be at the origin of the migratory crisis: "the solution is to free Africa from certain Europeans who exploit it and to allow them to live on what they have!".
Screenshot of a tweet mentioning the exploitation of resources of African countries by France via the CFA Franc. In the video, Giorgia Meloni says France is asking that "50% of everything Burkina Faso exports end up in French treasury coffers" (capture 11/24/22)
An interview prior to Franco-Italian tensions over the Ocean Viking
This video extract resurfaced on November 11 on Instagram as on Tiktok, in particular via a pro-Meloni account, shortly after the French government's criticism of Italian migration policy.
On November 10, French Interior Minister Gérald Darmanin notably castigated the "irresponsible" behavior of the Italian Prime Minister, who had refused to welcome the Ocean Viking boat from the NGO SOS Mediterranée and its 234 migrants collected at sea. end of October.
In recent days, many online publications, but also Anglo-Saxon media such as the Daily Mail or Sky News Australia, have presented the interview as a direct response to French criticism.
In reality, the arguments held by Giorgia Meloni, which therefore date from 2019, are misleading, in addition to being now obsolete for some of them, as three specialists in the Franc zone explained to AFP.
The franc zone: key figures, organization and operation (AFP / Alain BOMMENEL, Philippe MOUCHE)
No, France does not recover 50% of exports from African countries Contrary to what Giorgia Meloni asserts, neither Burkina Faso nor any other State using the CFA Franc should give 50% of its export proceeds to France. "It is a statement that does not hold and reveals an inability to understand monetary mechanisms", describes Massimo Amato, professor at Bocconi University in Milan and specialist in monetary issues in Africa, interviewed by AFP on November 22.
"There is an error on his part: it is not 50% of exports. It is 50% of the foreign exchange reserves of the CFA Franc countries which are deposited at the level of the French Treasury", confirms Demba Moussa Dembelé, economist Senegalese interviewed by AFP on November 23.
Giorgia Meloni is indeed referring to the obligation born in 1945 for the 14 States of the Franc Zone to deposit 50% of their foreign exchange reserves in an account within the French Public Treasury. A mechanism often wrongly described in recent years as a "colonial tax".
What is the principle of foreign exchange reserves?
These reserves are savings intended to maintain currency stability. Since 1945, the rate of the CFA Franc has been pegged to the franc and then to the euro, in order to guarantee the convertibility and stability of the currency.
In return for this guarantee of unlimited convertibility, the States of WAEMU (West African Economic and Monetary Union, see map) and CEMAC (Economic and Monetary Community of Central Africa, see map) were obliged to centralize 50% of foreign exchange reserves with the French Treasury.
The French Treasury considers that it must "be able to assess the evolution of foreign exchange reserves and measure the possible risks that the convertibility guarantee will be called", as explained on its site.
This fixity of the exchange rate between the euro and the CFA franc (1 euro is equal to about 655 CFA francs) does not only benefit France. "The exporting countries which could benefit from this fixed exchange rate are all the member countries of the euro zone, such as Italy", recalls Pierre Jacquemot, expert at the Jean Jaurès Foundation, who thus judges the argument of the Prime Minister Italian "absurd". "Except that the word 'Franc' creates fantasies".
Reserves belonging to African States
As explained by all the specialists interviewed, these reserves have always belonged to African states. “The French treasury is simply the guarantor, the bank with which these currencies are deposited, with remuneration at stake”, specifies Pierre Jacquemot.
"The reserves of the central bank are sent to an account managed by France on behalf of African central banks. These reserves are invested, and this return is returned to them", develops Massimo Amato.
What about the "seigneuriage" mentioned by Giorgia Meloni, this right which would be collected by France in exchange for issuing currency? If the banknotes are indeed printed in France, the French State does not issue this currency and does not recover any tax related to this manufacture. "The idea of a hostage-taking linked to the production of tickets does not make sense", underlines Massimo Amato, who describes a "purely technical outsourcing decision, even if we must not forget that this choice also has a symbolic meaning".
A point reiterated by the spokeswoman for the Ministry of Europe and Foreign Affairs Anne-Claire Legendre on Twitter on November 23: "The Banque de France prints CFA francs as part of a traditional customer/supplier contractual relationship with the issuing central banks", recalling in particular that the central banks of the States of West Africa (BCEAO) and Central Africa (BEAC) are "free to manufacture themselves or to contract with another printing company".
In addition, the central banks of West Africa (BCAO) and central (BEAC) decide on the amount, in other words the volume of banknotes to be printed and put into circulation, even if certain constraints weigh on them, such as the controlling inflation. Each country is also free to leave the franc zone to issue its own currency, as Guinea, Mauritania and Madagascar have done.
This 50% counterpart has, however, been perceived for several years as a humiliating dependence on France by the detractors of the CFA franc. "This mechanism was created in 1945 because France considered that the States still under French dependency were not mature enough to manage their currency themselves", describes Pierre Jacquemot.
For several years, many economists have notably called for the end of this consideration linked to the fixity of the exchange rate. "It is absurd to have our foreign exchange reserves blocked in the coffers of the French Treasury", had expressed in particular the economist, former Togolese minister and fervent defender of a reform of the CFA Franc Kako Nubukpo, in an interview with Opinion in 2015.
An obligation repealed since 2020 for West African countries
But since 2020, this obligation has been repealed for the eight countries of the UEMOA zone, following a reform of the CFA franc announced in December 2019 by the French and Ivorian presidents Emmanuel Macron and Alassane Ouattara.
In addition to having recorded the future change of name of the CFA Franc for the Eco, the Ivorian president had announced "the stop of the centralization of 50% of the reserves in the French Treasury". A way to resume the management of foreign exchange reserves requested for a long time in the face of the management of these reserves by France often described as paternalistic.
"The 50% of currency earned by the countries of the West African Franc zone from the French Treasury was repatriated to the central bank of West African States. This link with France therefore does not exist. more", explains Pierre Jacquemot.
A development that makes Giorgia Meloni's words completely obsolete in addition to being false, while Burkina Faso no longer has to deposit half of its foreign exchange reserves with the French Treasury since May 2020.
French and Ivorian presidents Emmanuel Macron (left) and Alassane Ouattara (right) during a press conference at the presidential palace in Abidjan on December 21, 2019. ( AFP / Ludovic MARIN)
AFP
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