Fighting Monetary Colonialism With Open-Source Code. France still uses monetary colonialism to exploit 15 African nations. Could Bitcoin be a way out?
In the fall of 1993, Fodé Diop’s family was saving up for his future. A brilliant 18-year-old living in Senegal, Fodé had a bright path in front of him as a basketball player and an engineer. His father, a school teacher, had helped him find inspiration in computers and in connecting with the world around him. And his athletic talents had won him offers to study in Europe and in the United States.
But when he woke up on the morning of January 12, 1994, everything had changed. Overnight, his family lost half its savings. Not due to theft, bank robbery or company bankruptcy — but a currency devaluation, imposed by a foreign power based 5,000 kilometers away.
The previous evening, French officials met with their African counterparts in Dakar to discuss the fate of the “franc de la Communauté financière africaine” (or Franc of the Financial Community of Africa), known widely as the CFA franc or “seefa” for short. For Fodé’s entire life, his CFA franc had been pegged to the French franc at a rate of 1 to 50, but when the late-night meeting concluded, a midnight announcement set the new value at 1 to 100.
The cruel irony was that the economic fate of millions of Senegalese was completely out of their own hands. No amount of protest could overthrow their economic masters. For decades, new presidents came and went, but the underlying financial arrangement never changed. Unlike a typical fiat currency, the system was far more insidious. It was monetary colonialism.
THE MECHANICS OF THE CFA SYSTEM
In their eye-opening book, “Africa’s Last Colonial Currency: The CFA Franc Story,” economic scholars Fanny Pigeaud and Ndongo Samba Sylla tell the tragic and, at times shocking, history of the CFA franc.
France, like other European powers, colonized many nations around the world in its imperial heyday, often brutally. After its occupation by Nazi Germany in World War II, the “Empire colonial français” began to disintegrate. The French fought to keep their colonies, inflicting a massive human toll in the process. Despite waging a costly series of global wars, Indochina was lost, then Syria and Lebanon, and, eventually, a French territory in North Africa, including cherished oil and gas-rich settler colony Algeria. But France was determined not to lose its territories in West and Central Africa. These had provided military manpower during the two World Wars and offered a cornucopia of natural resources — including uranium, cocoa, timber, and bauxite — which had enriched and sustained the metropole.
As 1960 approached, decolonization seemed inevitable. Europe was united in disengaging from Africa after decades of depredations and state-sponsored looting. But the French authorities realized they could have their cake, and eat it too, by ceding political control while retaining monetary control.
This legacy still stands today in 15 countries that speak French and use a currency controlled by Paris: Senegal, Mali, Ivory Coast, Guinea-Bissau, Togo, Benin, Burkina Faso, Niger, Cameroon, Chad, the Central African Republic, Gabon, Equatorial Guinea, the Republic of Congo and Comoros. In 2021 the French still exert monetary control over more than 2.5 million square kilometers of African territory, an area 80% the size of India.
FARIDA NABOUREMA’S STRUGGLE FOR TOGOLESE FINANCIAL FREEDOM
In December 1962, Togo’s first post-colonial leader Sylvanus Olympio formally moved to create a Central Bank of Togo and a Togolese Franc. But on the morning of January 13, 1963, days before he was about to cement this transition, he was shot dead by Togolese soldiers who had received training in France. Gnassingbé Eyadéma was one of the soldiers who committed the crime. He later seized power and became Togo’s dictator with full French support, ruling for more than five decades and promoting the CFA franc until his death in 2005. His son rules to this day. Olympio’s murder has never been solved.
Farida Nabourema’s family has always been involved in the struggle for human rights in Togo. Her father was an active leader of the opposition and has served time as a political prisoner. His father opposed the French during colonial times. Today, she is a leading figure in the country’s democracy movement.
Farida was 15 years old when she learned that the history of Togo’s dictatorship was intertwined with the CFA franc. By that time, in the early 2000s, she had started to get close to her father, and asked him questions about her country’s history. “Why did our first president get assassinated just a few years after we gained independence?” she inquired.
The answer: he resisted the CFA franc.
In 1962, Olympio began the movement toward financial independence from France. The parliament voted in favor of beginning such a transition, and of creating a Togolese franc and holding their reserves in their own central bank. Farida was shocked to learn that Olympio was assassinated just two days before Togo was supposed to leave the CFA arrangement. As she put it: “His decision to seek monetary freedom was seen as an affront to hegemony in Francophone Africa. They were afraid others would follow.”
Today, she says, for many Togolese activists the CFA is the major reason to seek broader freedom. “It is what animates many in the opposition movement.”
The reasons why are clear. Farida said France keeps more than half of Togo’s reserves in its banks, where the Togolese people have zero oversight over how those reserves are spent. Often, these reserves, earned by the Togolese, are used to buy French debt to finance the activities of the French people. In effect, this money is often loaned to the former colonial master at a negative real yield. The Togolese are paying Paris to hold their money for them, and in the process financing the living standards of the French people.
In 1994, the devaluation that stole the savings from Fode Diop’s family in Senegal hit Togo hard, too, causing a huge increase in national debt, a reduction in public funding to local infrastructure, and an increase in poverty.
“Remember,” Farida said, “our government is forced to prioritize holding our reserves in the French bank overspending at home, so when a shock hits, we have to degrade ourselves, to ensure that a proper amount of cash is in Parisian hands.”
This creates a national climate of dependence, where Togolese are forced to ship raw goods out, and bring finished goods in, never digging their way out.
Farida said that about 10 years ago, the anti-CFA movement started to gain more traction. Because of mobile phones and social media, people were able to unite and organize in a decentralized manner. It used to just be Ivorians and Togolese struggling separately, she said, but now there is a regional effort between activists.
For decades there has been the idea of an “Eco” currency, for all of the Economic Community of West African States (ECOWAS) nations, including regional economic powerhouses Nigeria and Ghana. Farida said that the French tried to hijack this plan, seeing it as a way to expand their own financial empire. In 2013, then-president François Hollande formed a commission that created a document for the French future in Africa. In it, they stated it was imperative to get Anglophone countries like Ghana involved.
Emmanuel Macron’s administration is now trying to rename the CFA franc the Eco, in a continuing process of “Africanizing” the French colonial financial system. Nigeria and Ghana backed out of the Eco project, once they realized the French were going to continue to have control. Nothing has formally happened yet, but the countries currently managed by the BCEAO central bank are on track to switch to this Eco currency by 2027. The French will still have decision-making ability, and there are not any formal plans to adjust the central banking of the Central African CFA nations or of Comoros.
“It is the high point of hypocrisy for French leaders like Macron to go to Davos and say they are done with colonialism,” Farida said, “while in fact, they are trying to expand it.”
She said that originally, the CFA franc was created on the basis of the currency plan used by the Nazi occupiers of France. During WWII, Germany created a national currency for the French colonies so it could easily control imports and exports by just using one financial lever. When the war ended and the French regained their freedom they decided to use the same exact model for their colonies. So, Farida said, the foundation of the CFA franc is really a Nazi one.
The system has a dark genius to it, in that the French have been able to, over time, print money to buy vital goods from their former colonies, but those African countries have to work to earn reserves.
“It’s not fair, it’s not independence,” Farida said. “It’s pure exploitation.”
France claims that the system is good because it provides stability, low inflation and convertibility for the Togolese people. But the convertibility tends to end up facilitating capital flight — when it is easy for businesses to flee the CFA and park their profits in euros today — while trapping the Togolese in a seigniorage regime. Whenever the CFA is converted — and it must be, as it cannot be used outside of a citizen’s economic zone — the French and the ECB take their slice.
Yes, Farida said, inflation is low in Togo compared to independent nations, but a lot of their earnings are going to fight inflation instead of supporting infrastructure and industry growth at home. She pointed to the growth of Ghana, which has an independent monetary policy and higher inflation over time than the CFA nations, compared to Togo. By any metric — healthcare, middle-class growth, unemployment — Ghana is superior. In fact, when one zooms out, she said that not a single CFA nation is among the 10 richest countries in Africa. But of the bottom 10 poorest, half are in the CFA zone.
Farida says that French colonialism goes beyond money. It also affects education and culture. For example, she said, the World Bank gives $130 million per year to support Francophone countries to pay for their books for public schools. Farida says 90% of these books are printed in France. The money goes directly from the World Bank to Paris, not to Togo or to any other African nation. The books are brainwashing tools, Farida said. They focus on the glory of French culture and undermine the achievements of other nations, whether they be American, Asian, or African.
In high school, Farida asked her dad: “Do people use any other language but French in Europe?” He laughed. They only learned about French history, French inventors, and French philosophers. She grew up thinking that the only smart people were French. She had never read an American or British book before she traveled abroad for the first time.
In general, Farida said, French Africa consumes 80% of the books that the French print. President Macron wants to expand on this dominance, and has promised to spend hundreds of millions of euros to boost French in Africa, declaring that it could be the “first language” of the continent and calling it a “language of freedom.” Given current trends, by 2050 85% of all French speakers could live in Africa. Language is one pillar of support for the CFA franc’s survival.
Politics is another. An important part of the CFA system is French support for dictatorship. With the exception of Senegal, not a single CFA bloc country has ever had meaningful democratization. Every single successful tyrant in Francophone Africa, Farida said, has had the full backing of the French state. Whenever there is a coup against democracy, the French support the coup-makers as long as they are friendly to the CFA regime. But the moment anyone has anti-French tendencies, you see sanctions, threats, or even assassinations.
Farida points to the example of Chad and Mali today. Both countries are under threat from terrorism and rebellion. In Chad, late military dictator Idriss Deby was propped up by France for three decades until his death in April. According to the Chadian constitution, the head of the parliament is normally next in line to be the president, but instead, the military-installed Deby’s son, a general in the army. The French government applauded this illegal transition and President Macron even visited Chad two months ago to celebrate this sham. In a tribute speech, he called Deby a “friend” and “courageous soldier” and said, “France will not let anybody put into question or threaten today or tomorrow Chad’s stability and integrity.” The son, of course, will promote the CFA franc.
Mali, on the other hand, Farida said, had a coup a month after Chad’s. The junta and the population are not as friendly to Paris and appear to be seeking in Russia a new partner to stymie terrorism. So the French government has called the coup “unacceptable,” is threatening to withdraw troops from Mali to “leave them alone with the terrorists,” as Farida said, and is preparing sanctions. Mali is being punished by France for doing the same thing that Chad did. There is despotism and corruption on both sides. The only difference is that Mali wanted to move away from French monetary control, while Chad is still cooperating.
“When you are a dictator, as long as you are working for France, they will continue finding excuses to help you stay in power,” said Farida. They did the same in 2005 in her country of Togo, which led to a son taking over from his dictator father and to her own political awakening.