Introduction
Samir Amin was a travelling companion of the newly independent African states. He was an advisor on public policy planning to the Malian government (1960–1963), professor of economics at the University of Dakar (1963–1967) and director of the Dakar-based African Institute for Economic Development and Planning (IDEP) between 1970 and 1980. These experiences have been documented in his memoirs (Amin 2015) and in the many books he wrote on African countries (Amin 1965, 1967, 1973). This article is about less well-known aspects of his intellectual and activist contribution to the political economy of decolonisation in sub-Saharan Africa. In particular, it focuses on his fight for monetary sovereignty in the countries of the West African Monetary Union (WAMU). For these former French colonies that share the CFA franc, a currency created by the French Ministry of Finance in 1945, obtaining independence from 1960 onwards did not put an end to colonialism, particularly in the monetary field. At a time when well-trained African economists were a rather rare species, Amin had been almost alone in advising progressive African leaders and fighting alongside them for monetary decolonisation. This article addresses his arguments against maintaining the CFA franc. To what extent do they fit into his theoretical framework of accumulation on a world scale, and what was his intellectual influence in the reforms brought to the functioning of the WAMU since the mid 1970s? Faced with the current mobilisation of pan-African social movements for the abolition of the CFA franc, how can we retrospectively evaluate, 50 years later, his intellectual contribution?
The article starts with a brief description of the genesis of the franc zone and its functioning, followed by a short discussion of Amin’s views on the specificities of monetary mechanisms and the role of the banking system in underdeveloped countries. The following sections (‘From the bold reformist … ’; ‘ … to the abolitionist’) focus on the monetary reform proposals put forward by Amin and on how they were welcomed by African heads of state. In the section ‘Birth of a debate’, it is shown that the economic debate on the CFA franc was historically established in this particular context when Amin was trying to challenge the status quo defended by the French government and its organic intellectuals. The article closes with ‘An a posteriori intellectual victory’, a retrospective assessment of the relevance of Amin’s criticism of the CFA franc at the time, and conclusions.
The last colonial currency area
When it was created in 1939, following the collapse of the international monetary system based on the gold standard, the franc zone functioned as a trade and monetary defence zone bringing together territories under French domination in Africa, Asia, the Pacific and the Americas.1 In most of this colonial empire, it was the French currency that circulated with differentiated monetary signs from one place to another. At the end of the Second World War, the decision of the French Ministry of Finance to devalue the metropolitan franc at different rates from one geographical area to another gave rise to colonial francs. On 26 December 1945, the franc of the French colonies in Africa (CFA franc) was declared to the nascent International Monetary Fund (IMF) with an incredible parity: 1 CFA franc = 1.70 metropolitan francs. With the independence of North Africa and Asia, the members of the franc zone were gradually reduced to the former French colonies in sub-Saharan Africa and the Pacific.
From the late 1950s onwards, the decolonisation process in Africa had led to the gradual dismantling of colonial monetary blocs. This was particularly the case for the sterling area, the peseta zone, the escudo zone and the Belgian monetary zone. Only the franc zone was the exception. Indeed, before granting them independence, France had required sub-Saharan African countries to sign ‘cooperation agreements’ in various fields: foreign affairs, foreign trade, raw materials, currency, etc. These agreements effectively deprived the promised ‘independence’ of any substance. Thus, for the former French colonies in sub-Saharan Africa, access to international sovereignty was premised on remaining in the franc zone.
France wanted to maintain the franc zone for political, economic and geopolitical reasons. In a world structured around the ‘exorbitant privilege’ of the US dollar, the CFA franc ‘arrangement’ is a way for France to secure a more localised ‘exorbitant privilege’ in its African sphere of influence (Koddenbrock and Sylla 2019, 13). Indeed, this ‘arrangement’ was and still is reflective of the junior status of France as an imperialist country having to deploy some craft to match its peers. France lacks the industrial power of (Western) Germany, and Paris is not a central financial hub like London. Its unstable currency had to adjust permanently to US dollar hegemony. Control over its former sub-Saharan empire, to the extent that it provides a competitive advantage, was/is therefore essential to compensate for its lower rank in the industrial, financial and monetary world hierarchies and, thus, to ultimately defend its geopolitical status.
The franc zone helps organise a monetary, banking and financial integration between France and its former colonies. This integration is based on a set of mechanisms: the pegging of the two CFA francs, renamed after independence (see Figure 1), to the French currency; their free convertibility into French currency; the deposit of almost all the foreign exchange reserves of the central banks of the zone into a special account of the French treasury called the ‘operations account’ in exchange for the guarantee of convertibility of the CFA franc by the French treasury; the control of central banks and monetary policy by Paris; and the domination of the banking sector by French banks.
This monetary organisation centralised from Paris gives France an instrument of political control at the service of metropolitan capitalism: it controls in particular the parity of the CFA franc as well as the franc zone’s commercial and financial transactions with the rest of the world. In addition, France can buy on credit in its own currency (rather than in US dollars) all raw materials from African countries in the franc zone, an advantage allowing it to save its foreign exchange reserves and strengthen the external value of its currency. Its companies have access to preferential markets and can freely repatriate their capital and incomes.
Following independence, some African heads of state tried to leave the franc zone. But the experiments were not successful. Guinea, under President Sekou Toure, withdrew from the franc zone and acquired a national currency in 1960. In retaliation, the French secret services flooded the Guinean economy with counterfeit bank notes. The Malian president Modibo Keita, with whom Samir Amin collaborated, took his country out of the franc zone in 1962. However, the country would return to it in 1967, as a result of economic and monetary mismanagement and also strong political pressure from France and neighbouring countries (Pouemi 2000 [1980], 126–134; Julienne 1988, 240–254, 332–348; Migani 2008). The Togolese president Sylvanus Olympio was assassinated in 1963 by Togolese soldiers, with the complicity of the French authorities, on the eve of the launch of the Togolese national currency.
When Samir Amin became involved in the monetary debate at the end of the 1960s, France had already neutralised the attempts to leave the franc zone. Most African leaders were committed to the metropolitan cause through realism or opportunism.
Amin on money and underdevelopment
The positions that Amin defended regarding the franc zone derive from his experience as a planner with a good knowledge of the economic challenges of the newly independent African countries and from his theoretical work. In Chapter 3 of Accumulation on a world scale, entitled ‘The monetary mechanisms in the periphery and the world monetary system’, Amin (1974) discussed his views on money, including the particular role played by the banking system in underdeveloped countries.
According to Amin, the monetary integration of the countries at the periphery of the capitalist system often went hand in hand with their banking integration. The monetary integration of the periphery during the colonial period materialised through the adoption of a foreign exchange standard system. This consists of the issuance of a local currency convertible at a fixed rate to the dominant/metropolitan currency in a context of free capital mobility. The currency boards in the sterling area were an example of a foreign exchange standard, as are the currencies of the franc zone, which are nothing other than the French currency presented differently.
The banking integration of underdeveloped countries revolved around the organisation of their banking sector. That was centred around affiliates of foreign/metropolitan banks which initially had the monopoly of monetary issuance in the territories where they operated and which therefore controlled credit management. For Amin, independence did not put an end to this situation. The new national central banks had limited foreign exchange reserves and were weak when confronted by the financial strength of foreign commercial banks, which could always obtain their desired level of liquidity from their parent bank.
The banking sector in underdeveloped countries is characterised by what Amin calls ‘inertia’. While in developed countries the banking sector has historically been involved in distributing credit to different sectors of the economy and in financing industrialisation, in the underdeveloped countries it concentrates mainly on short-term financing of commercial activities, particularly export activities. Amin wrote: ‘foreign banks nearly always confine themselves to financing the capitalist spheres of the economy, leaving to other organizations [like the state and cooperatives] the task of disintegrating the local subsistence economy’ (Amin 1974, 438). Indeed, banks in that context are not interested in financing the modernisation of traditional agriculture and the crafts, two sectors they judge too risky owing to their low productivity and the high volatility of both supply and demand. This ‘inertia’, however, is functional: it corresponds to the needs of an extrovert economy of the colonial type, i.e. one specialised in the export of primary products. It ‘constitutes a powerful means of guiding the development of peripheral capitalism in a way that conforms to the needs of the center’ (Amin 1974, 438).
According to Amin, the monetary mechanisms and the functioning of the banking sector in the countries on the periphery of the capitalist system contribute to keeping them underdeveloped. In this situation of monetary dependence, the role of money is to be ‘the effective instrument for organizing the transfer of value from the underdeveloped periphery of the world system to its advanced center’ (Amin 1974, 397). In a global and monetarily hierarchised system, underdeveloped countries tend to see their currencies depreciate because they are forced to pay their deficits to rich countries in hard currencies, while the latter often have the option of paying their deficits to them in their own currencies.
Monetary autonomy, for Amin, presupposes the establishment of a national currency managed by a national central bank capable of controlling credit management and of implementing effective capital controls. It is a necessary although not a sufficient prerequisite for any national development policy. For one should not overestimate the importance of the monetary instrument and lose sight of the more fundamental forms of dependence that operate on the real economy. Amin warns in particular against what he calls ‘monetary illusions’, i.e. the naïve belief that formal monetary independence is enough to end dependence on the real domain. Monetary independence for him is illusory as long as ‘the strategy of integration into the world market’ is not called into question.
What does it mean to challenge the ‘strategy of integration into the world market’? This point is elaborated in more detail by Amin in his book Delinking (Amin 1985). He listed five conditions for a ‘controlled accumulation’ – that is to say, for a self-centred accumulation: the local control of the reproduction of the labour force, the local control of the market (which must be largely reserved for national production), the local control of the natural resources, the local control of the technologies, and finally a ‘local control over the centralisation of the surplus […] guaranteeing the national capacity to direct investment’ (Amin 1985, 27, my translation).2 This last point makes explicit reference to the monetary and financial dimension. It assumes ‘the formal existence of national financial institutions but also their relative autonomy in relation to the flow of transnational capital’ (Amin 1985, 27).
From the bold reformist … .
The first systematic academic writing by Amin on the CFA franc issue is probably his article in the Revue Française d’Etudes Politiques Africaines (Amin 1969). Amin did not ask at that point for the abolition of the franc zone but rather for reforms that presupposed its continuation. The article is based on a set of macroeconomic data mainly concerning the franc zone countries in Central Africa over the period 1960–1968, excluding their counterparts in West Africa.
Amin’s point of departure in this article is that self-centred development is incompatible with the monetary structures of the franc zone. This latter was designed with a view to maximising the free movement of foreign capital (French capital in particular) while requiring in return primary specialisations for countries, a weak role for the states in economic management, a monetary integration with the ex-metropolis and a passivity of the banking sector with regard to the financing of development. In these circumstances, defending the monetary status quo for Amin amounts to defending the perpetuation of the old colonial order. It also presupposes that the promotion of foreign capital, to the detriment of national productive capacities, will enable African countries to get out of underdevelopment.
Amin showed that the franc zone countries continued to operate as colonies during the first decade after independence. Two-thirds of gross investment in the Central African countries were financed by foreign private capital and external public aid, while the public deficit of the zone between 1961 and 1964 was 90% financed through French budgetary subsidies and advances from the French treasury. Contrary to the usual conservative view of the franc zone as an instrument of prosperity, Amin saw this colonial relic as an instrument for an extroverted accumulation. During the 1960–1968 period, he noted a weak growth of real income per capita in the franc zone countries in Central Africa. This evolution was not unrelated, according to him, to the deterioration of the terms of trade that these countries suffered during the same period.
One of Amin’s major objections to the functioning of the franc zone was that monetary policy was more restrictive in African countries than in France, where credits to the state and the economy were more substantial. ‘The monetary system of African franc zone countries has therefore so far worked in a highly deflationary direction’, he wrote (Amin 1969, 43). According to him, this monetary status quo cannot last. This is not only because it is futile to expect development worthy of the name from foreign capital alone, but also because France itself had stopped financing the public deficits of African countries in the franc zone. Beyond that, the monetarist orthodoxy applied in the franc zone seems to him as absurd as it is counterproductive: ‘the status quo claims to impose on Africa a performance that will then be unique in the history of the world: rapid development without inflation’ (Amin 1969, 43).
On the basis of this diagnosis, Amin proposed a reform plan based on three main axes. First axis: the monetary and financial system must play a more active role in financing development. To this end, central banks must provide more financial support to national treasuries, which would be allocated primarily to development. Similarly, the rules for granting credit by the banking sector must be relaxed to facilitate financing for development. This will allow the domestic private sectors to take over from foreign private capital.
Second axis: exchange rate and transfer policy must be more self-centred, i.e. reflect the needs of African countries rather than those of foreign interests. African countries in the franc zone must put in place capital controls vis-à-vis France to aspire to a minimum of monetary autonomy. In addition, they must adopt a common legislation to limit the transfer of profits and savings. Finally, they must raise the level of taxation on the profits of foreign companies.
Third axis: the parity of the CFA franc which he considered to be overvalued must be revised. A devaluation vis-à-vis the franc would have the advantage of redistributing income to farmers and governments and also of breaking out of the ‘regressive equilibrium’ of the time: a balance of payments equilibrium associated with a deflationary environment (Amin 1969, 44).
These reforms do not only concern the monetary domain. And that is understandable. For Amin, monetary reform in the countries on the periphery of the capitalist system will always be limited in its impact as long as the foundations of the ‘strategy of international specialisation’ remain in place, i.e. as long as socio-economic structures operate in the direction of transferring the economic surplus to the outside. While it may be necessary, monetary reform alone can never be sufficient. This is why the reforms suggested by Amin consist on the one hand in tackling the monetary and real mechanisms facilitating the transfer of surplus abroad and on the other hand in mobilising the monetary instrument in coherence with other instruments such as taxation in order to increase the surplus that can be invested at national level.
Amin held the same positions in his subsequent work on the issue of the CFA franc.3 However, he would further radicalise his criticism.
… to the abolitionist
The late 1960s was a period of great monetary turbulence marked by increasing uncertainties about the sustainability of the international monetary system based on the gold exchange standard, with the American president Richard Nixon having decided in August 1971 to suspend the dollar convertibility to gold. In the franc zone, the instability of the franc to which the two CFA francs were linked by a fixed parity gave African heads of state additional reasons for concern. Since the foreign exchange reserves held in the operations accounts were mainly in francs, the surprise devaluation of the franc in August 1969 led to foreign exchange losses for African countries in the franc zone in addition to the increase in their external debt. While any devaluation of the franc should in principle be subject to consultation between France and African countries in the franc zone, France had unilaterally decided to devalue its currency. This did not please some African heads of state, such as Houphouët-Boigny of Côte d’Ivoire (Julienne 1988, 369–371; Feiertag 2017, 298–299) and would, later on, culminate in a nascent dissent within the franc zone.4 The latter had to learn, at their own expense, that a devaluation if discussed publicly could never be effective and, consequently, that the provisions on France’s obligation to inform African partners, in the event of a proposed devaluation of the franc, had no practical significance (Vinay 1988).
It is in this context that Hamani Diori asked Amin to propose a plan for reforming the franc zone that he could advocate with his peers in the WAMU and with France. The Niger president was aware of the skills of the Franco-Egyptian economist and his sincere commitment alongside the progressive forces working to liberate Africa from the colonial yoke. He considered it necessary and urgent to make changes in the functioning of the franc zone – a position he must have strengthened following his exchanges with Canadian professor Rodrigue Tremblay, an economist also critical of the franc zone (Julienne 1988, 414). The latter’s views on the subject were sketched in an expert report published in 1974 by USAID (Kamrany et al. 1974). Tremblay, with his co-authors, emphasised that the organisation of the franc zone perpetuates the old colonial order and therefore constitutes a significant obstacle to the development of its member countries:
The present system of a double monetary union [between African countries and between them and France] for these countries has two main and interconnecting characteristics. First, the money supply mechanism is very strictly controlled, with special emphasis on a tight fiscal constraint for each participating government. Second, there has never been any implementation of an independent exchange rate policy, and the CFA franc is chronically overvalued in regard to both the currencies of neighboring countries and those of the rest of the world.
A curiosity among developing countries, the countries of the West African Monetary Union have a fully automatic convertible currency and one of the lowest rates of economic growth. […] it can be demonstrated that the entire system is geared toward fulfilling one main objective: maintaining a fully convertible and stable African currency within the franc zone. […]
[T]he banking system [in the WAMU] does not play an effective role toward capital accumulation, since its operating rules are basically aimed at financing trade flows and capital repatriations, rather than at stimulating monetization, savings and local investments. Because the monetary and banking system are biased against indigenous savings and investments, they perpetuate the past system of economic production and are among the major institutional bottlenecks which limit indigenous opportunities in the region, especially in the traditional sector. (Kamrany et al. 1974, 19–21)
This analysis joined and reinforced that of Amin who remembered writing a note in 1969 to President Diori after the visit of Professor Tremblay (Amin 2016, 2). In his ‘Note on the reform of the franc zone system for African countries’ (Amin 2016, 2), a text dated March 1972 and intended for Hamani Diori, Amin started from the diagnosis contained in his 1969 article. He stressed that monetary reform is insufficient, if it is not part of a broader framework, to change existing economic structures. The note reiterated some issues like the overvaluation of the CFA franc, the lack of an autonomous monetary policy in the WAMU and the passivity of the BCEAO, which is not really a central bank, given its limited support to national treasuries, and that it does not manage the foreign exchange reserves of its monetary zone. A new element appeared in the diagnosis of the evils of the franc zone: Amin underlined that France takes advantage of the holding of the external reserves of the African countries which, on the other hand, suffered from the surprise devaluation of the franc in 1969.
However, elements of rupture appeared with the reform plan. Amin had become an abolitionist. He was no longer satisfied with the preservation of the franc zone. ‘The argument that the current system, by maintaining a single currency for all countries of the franc zone, is an element of integration that should be preserved, is misleading’, he argued (Amin 2016, 5). For Amin, each WAMU country should have its own national currency issued by its own central bank. Each central bank should manage the foreign exchange reserves of its country and should be allowed to grant budgetary advances to its national treasury. The operations accounts should therefore be abolished in favour of comptes d’avances (swap lines) with ceilings that would be negotiated periodically between each African country individually and its partners (the rich countries for the most part). If Amin’s reform plan were to stop there, he would have just followed the path that the countries that had already left the franc zone had taken: a nationalist exit. Yet, having observed the unsuccessful monetary experiences of Guinea and Mali in the 1960s (Amin 1965, 21–129, 131–165; Amin 1973, 82–97, 124–139), this option could not convince him.
In his reform plan Amin opted instead for a collective exit from the franc zone through the establishment of a system of ‘mutually supportive national currencies’ (to use an expression from Pigeaud and Sylla 2021, 133). In other words, the rationale was to implement advanced forms of economic and monetary integration on the basis of national currencies and in a pan-Africanist perspective. That was intended to transcend the type of economic integration of colonial origin that divided Africa in different spheres of influence (English, French and Portuguese) for the benefit of the former metropolises. Amin proposed the gradual extension of this system of solidary national currencies to all of West Africa. In concrete terms, there would be some relative freedom of movement of goods, capital and persons between the WAMU countries, an area which would therefore gradually include English-speaking and Portuguese-speaking countries. Between the WAMU and the outside, however, there would be capital controls. Exchange rates would be reviewed on a case-by-case basis to prevent overvaluation of some of them. The currencies of the zone would be linked to each other by a system of fixed but adjustable parities. Central banks could, within certain limits, intervene in a solidarity approach to support the currencies of countries in the area in difficulty. WAMU countries would adopt a less ‘liberal’ common investment code vis-à-vis foreign capital.
Last but not least, the reform plan called for the establishment of a common fund for development financing in West Africa. Given that West African countries have different levels of development and are evolving at different rhythms, its main objective would be to help correct structural imbalances, particularly between coastal countries that are better endowed and more integrated into trade channels, and those from the interior that are less endowed and landlocked.5
The aspects that made up the strength and originality of the reform plan – pan-African solidarity, the abolition of the franc zone, a regional economic integration that recognises national specificities and is at the service of a self-centred development – were equally those which made problematic its political acceptability by a France anxious to maintain its private domain at all costs. As Amin wrote in his memoirs: ‘Hamani Diori was personally convinced by my analysis. But it still had to convince Côte d’Ivoire and Senegal, whose answers were unequivocally negative. Like that of France at the time’ (Amin 2015, 353, my translation).
Even if Amin’s proposals were not followed, they had the merit of having radicalised President Hamani Diori to whom his African counterparts had entrusted the task of producing a memorandum on the reform of the WAMU. This memorandum to France was ‘a radical critique of the franc zone’ according to the historian Olivier Feiertag who stresses the ‘undeniable’ imprint of the IDEP director and that of the ‘Canadian experts’ of the Niger president (Feiertag 2017, 301). On 8 February 1971, the Diori memorandum was approved by the WAMU countries with the exception of Senegal, which distanced itself from the positions expressed in it. Côte d’Ivoire would do the same (Feiertag 2017, 300). Despite the conservative attitude of these last two countries, the time for reform had come. Mauritania decided to withdraw from the WAMU in 1972. A year later, Madagascar left the franc zone. The changes, admittedly modest, that took place in 1972 in the franc zone in Central Africa were to extend to West Africa. They essentially boiled down to managing foreign exchange reserves and reorganising the BCEAO.6
On the first point, the mandatory deposit rate of foreign exchange reserves at the French treasury was now set at 65%. In other words, the BCEAO could hold 35% of its foreign exchange reserves elsewhere than in the operations account. The principle of a foreign exchange guarantee for the deposits in the operations account had been accepted by France, but would be not implemented until the early 1980s onwards.
On the second point, the headquarters of the BCEAO were transferred from Paris to Dakar from 1978, as was the case a year earlier with the transfer of the BEAC headquarters to Yaoundé. The staff of these two central banks, formerly French, had been Africanised. At the level of the boards of directors of these two central banks, France, which formerly held one-third of the votes, now held only one-seventh. But it had a right of veto. Finally, the BCEAO was authorised to grant advances to national treasuries up to 20% of their tax revenue of the preceding year (Pigeaud and Sylla 2021, 58–59).
These reforms were minor concessions on the part of a France that had been put under pressure. They did not affect the operating rules of the franc zone, nor have they been an adequate response to criticisms of the overvaluation of the CFA franc, the lack of autonomy of monetary policy, the anachronistic and paternalistic nature of the operations account system, the monopoly of credit management by foreign banks and so on. It would therefore be wrong to see in these reforms that led to the ‘Africanisation’ of the franc zone institutions an episode of monetary decolonisation. These ‘administrative’ changes had rather contributed to the renewal of a system of monetary colonialism whose functional logic has remained intact until now.
Birth of a debate
From the late 1950s to the mid 1960s, the struggle for monetary decolonisation was part of the struggle for independence. It was then a matter for heads of state and political leaders. In contrast to this first phase of protest against French monetary imperialism, the second that took place between the late 1960s and the mid 1970s was carried by reformist leaders in alliance with progressive intellectuals. Amin’s intellectual and activist contribution to the monetary issue in French-speaking Africa is located in this particular context. From that point, African politicians from the franc zone, fearing reprisals from France or satisfied with the status quo, left the fight for monetary liberation to intellectuals.
Amin had the merit of participating in the emergence of an intellectual (and not only political) debate on the CFA franc, having articulated the abolitionist point of view with panache and competence. His 1969 article triggered immediate academic reaction (Leduc 1969; Amin 1969, 1970; Cissé 1972). From August 1970, when he returned to Dakar as IDEP director, Amin was actively involved in scientific debates on the CFA franc, African integration and underdevelopment in general. His activism did not go unnoticed by the French secret services, which monitored him without his knowledge. Thus, in a correspondence dated 20 October 1971 addressed to the French foreign minister and entitled ‘note on the political activities in Dakar of Mr Samir Amin’, the French Ministry of the Interior complained of the material and moral support that the IDEP director brought to Senegalese students who protested during May 1968, his pro-Chinese sympathies and the disturbing character of his theses on the underdevelopment and the fragmentation of West Africa (Ministère de l’Intérieur 1971).
On the monetary issue, Amin participated in two important international meetings at that time. At a conference of the African Development Bank held in Abidjan in 1973 he presented a short report on the ‘Monetary barriers to the expansion of intra-African trade and to development in Africa’ (Amin 2016). Two years earlier, at the colloquium organised by the University of Montreal under the scientific authority of Professor Tremblay (1972), he had a memorable exchange with French economists Patrick and Sylviane Guillaumont, who have since been the main organic intellectuals of French monetary imperialism (Guillaumont and Guillaumont 2017). It is important to revisit this historic moment where the terms of the debate between supporters of the CFA franc and their critics were laid down. This debate not only opposed orthodox economists to a radical political economist who openly claimed to be a communist. It also highlighted two distinct uses of economic knowledge: an economics serving the powerful versus an economics for liberation.
In their long paper, the Guillaumonts defended the franc zone in time-weary fashion. Intended to justify the status quo, their apologetic posture aimed in practical terms to make two points: the franc zone does not harm the development of its members; and France does not benefit, its acts benevolently (Guillaumont and Guillaumont 1972). According to Amin (2016, 1), the Guillaumonts defended ‘the paleo-colonial positions’ of the French government.
On the one hand, they critiqued the idea that the CFA franc was a mechanism of underdevelopment. From their point of view, the franc zone was beneficial to African countries. They asserted it was an opportunity for African countries to have a stable currency ‘guaranteed’ by France that serves their economic integration. This would make the franc zone on the African continent an island of good monetary management in an ocean of monetary irresponsibility – a view that rehashed the implicit colonialist assumption that Africans would be unable to ensure proper monetary management themselves.
They brushed aside the idea that the preservation of the franc zone provided economic benefits to a France sometimes accused of exploiting African countries through this colonial relic. Their argument was that France does not need African countries and their foreign exchange reserves since their weight is increasingly marginal in its foreign trade and foreign investment. In addition, they noted that the commercial advantages that France had enjoyed in the past were being eroded with the dismantling of former European colonial spheres of influence as a result of the European integration process.
Amin (1972) refuted their analysis point by point. He began by emphasising that he could not tackle monetary issues without placing them in a broader context and that he could not accept either the theoretical bias that ‘there is no alternative for African countries of the franc zone’ on the pretext that ‘the only possible development for these countries must be based on a very wide external openness, a priority for exports, a call for foreign private capital and public aid’ (Amin 1972, 351–352, my translation). For Amin, the franc zone is a monetary system tailored to an accumulation of an extroverted type, i.e. dependent on external dictates. That is why it worked in a ‘deflationary’ or even ‘antideveloping’ way (Amin 1972, 361, my translation). In the context of a self-centred development model, another monetary system would be needed.
Amin critiqued the observation that the franc zone was a space open to global competition and where France no longer had any particular advantages. He argued that the relationships between France and its ex-colonies remained as close as in the past. This was despite the evolution noted at the time, including the convertibility of the franc and the growing trade openness of African countries to the rest of the world. In fact, the end of the tariff preferences granted to French products had not in any way undermined the competitive advantage, the ‘protection’, enjoyed by French companies and products in the franc zone.
The monopoly of the colonial firms established in Africa, the close relations of the local banking system with these firms constitute the essential means of this ‘protection’.
[t]he rigorous management of credit monopolised by French banks established in Africa, whose interests are linked to those of colonial trading houses, has allowed France to maintain a dominant position despite the formal opening of the markets of these African countries to the manufactured products of the Common Market. (Amin 1972, 357–358)
Amin noted that while the benefits associated with this neocolonial type of dependency structure should not be exaggerated, neither should they be underestimated. The idea that France maintains the franc zone just to help African countries without reaping substantial benefits is unfounded. Based on the work of a French monetary expert (de la Fournière 1971), the IDEP director pointed out that the foreign exchange reserves of African countries held by the French treasury were of the same order of magnitude as the exports of the French automobile sector in 1966. In addition to these substantial contributions in terms of foreign currency deposits, the importance of the franc zone for the former metropolis is based on the fact that it allows the French economy to face international competition with less reduced margins of manoeuvre. ‘Africa’, Amin wrote,
does not constitute, for metropolitan capitalism, a ‘dead weight’ that it drags; on the contrary, it fulfils – in the international competition between this [i.e. French] capitalism and that of the other industrial powers – functions analogous to that of a leading sector. This is far from being ‘negligible’. (Amin 1972, 359)
Through this incisive discussion, Amin laid down the essential terms of the economic argument against the CFA franc. It was an argument that would be mobilised, in one way or another, by the next generations of African economists. The idea that the CFA franc, alongside the French military bases, is an instrument of political control by France over its former colonies was not used by Amin, although at the time there already existed enough empirical evidence to support it. He perhaps wanted to focus on essential issues where concrete progress could be made while avoiding offending a French partner allergic to any criticism vis-à-vis its imperialist actions. The IDEP director possibly did not want to offend Senegal’s President Léopold Sédar Senghor who was an ally of France and had been personally involved in facilitating the installation of CODESRIA in Dakar.
An a posteriori intellectual victory
Amin and the supporters of a radical reform or even of an abolition of the franc zone won the economic debate in their time. The validity of their criticisms and the foresight of their proposals were to be highlighted in the following decades. They probably were not aware of their victory on the scientific field because they did not have enough historical distance and especially because they had not been successful politically. The balance of power was unfavourable to them. The alliance between Côte d’Ivoire and Senegal, the two largest economies of the WAMU, and France was a guarantee of status quo. In what way have later developments vindicated the abolitionist views articulated by Amin?
First, the observation that the CFA franc suffers from chronic overvaluation, varying in degree from country to country, has been acknowledged by the BCEAO itself (BCEAO 2000, 47). Unfortunately, instead of a ‘soft’ revision of its parity vis-à-vis the French franc, the CFA franc was subject to a brutal devaluation of 50% in 1994, the first since 1948. The African heads of state of the zone were mostly opposed to this decision imposed by France and the IMF. They were, however, cornered: the choice was either to devalue or to be cut off from international aid.7 At that time, as in the 1970s, the rationale of monetary imperialism had taken precedence over any consideration of economic coherence. A uniform devaluation rate for the 13 countries that used the CFA franc had the political advantage for France of maintaining its monetary empire. But it was by no means justified in view of the uneven degree of exchange rate overvaluation across countries (Parmentier and Tenconi 1996, 161–162). This was even acknowledged by an IMF expert (quoted by Conte 1994, 35): the 50% devaluation rate applied to all countries was a way of rewarding the ‘mismanagement’ of Cameroon and Côte d’Ivoire (Conte 1994, 36) – countries for which this rate was ‘justified’ – by unjustly sanctioning most of the rest by a considerable increase in inflation and in the external debt burden. If this devaluation did take into account the specific needs of each country, it should have led to the break-up of the franc zone. In 1999, the substitution of the euro for the French franc could also have led to this result or at least to the breaking of the monetary links between African countries and France. This was not the case, however. France had done a good job from a diplomatic point of view of making its European counterparts accept the principle of pegging the CFA francs to the euro. Unfortunately, the gains in terms of price competitiveness associated with the 1994 devaluation would subsequently be undermined by the significant appreciation of the euro. Between 2002 and 2008, the euro would gradually appreciate by more than 90% vis-à-vis the US dollar, the currency in which the countries of the franc zone receive their export revenues (Pigeaud and Sylla 2021, 110).
Second, well-informed African observers since the 1960s have repeatedly pointed to the ‘fictitious’ nature of the French convertibility guarantee. Amin (2016, 4, my translation), for example, wrote that ‘the unlimited French guarantee loses all meaning’ since the balance of the operations accounts had always been in surplus. Here too, they were proved right. If the French convertibility guarantee had really worked, there would probably have been no devaluation in 1994. In fact, between 1960 and today, this ‘guarantee’ was activated – i.e. the French treasury granted an overdraft to the BCEAO and the BEAC – only during the period 1980–1993. In the case of the BCEAO, the amounts lent by the French treasury were negligible – 640 million French francs on an average annual basis between 1980 and 1990 (BCEAO 2000, 41) – and were intended to maintain the principle of free capital transfer for French companies in particular (Pigeaud and Sylla 2021, 74). It is ironic to note that this so-called guarantee has always required, in return, the French presence and power of veto in the organs of the central banks of the franc zone, and the deposit of half of their foreign exchange reserves with the French treasury.
Third, the abolitionist view that the franc zone is an instrument for an extroverted accumulation – thus, at best growth without development – has also been confirmed in the following decades. Côte d’Ivoire, the WAMU’s largest economy, had a real GDP per capita in 2016 that was one-third lower than at its 1978 peak (Sylla 2020). The other seven countries in this currency area are all ranked among the least developed countries (LDCs). Benin, Burkina Faso, Mali and Niger have belonged to this group since 1971, when the United Nations created the category. After two decades of structural adjustment, Senegal joined them in 2000 (Pigeaud and Sylla 2021, 105).
On other points such as the deflationary environment of the franc zone, the ‘inertia’ of the banking sector, the non-negligible opportunity costs of France’s management of African countries’ foreign exchange reserves, and so on, abolitionists like Amin had also been right (Koddenbrock and Sylla 2019).
Conclusion
The struggle for monetary decolonisation in French-speaking Africa at the turn of the 1970s was part of the project to put an end to the extroverted development model inherited from colonisation. Samir Amin made a significant intellectual and militant contribution to this struggle, which is enriched by other contributions (Diarra 1972; Pouemi 2000 [1980]; Dieng 1982; Koulibaly 2009; Mbaye 2009; Yao 2012; Agbohou 2016; Nubukpo et al. 2016; Pigeaud and Sylla 2021). Amin focused on the CFA franc issue again from 2016 onwards, in a context marked by the emergence of a social movement led by intellectuals and pan-Africanist organisations demanding the end of this colonial currency (Sylla 2017). He chaired two meetings on the subject, on 5 November 2016 and on 16 December 2017, organised in Dakar by his disciple and colleague Demba Moussa Dembélé in collaboration with the Rosa Luxemburg Foundation. Despite the developments over the past five decades, his positions remained unchanged on these occasions: monetary independence is necessary but not sufficient. His monetary reform proposals from the 1970s appeared to him still relevant in the current context (Amin 2016, 1). Reflecting on the African countries outside the two CFA franc blocs, he then argued that their monetary sovereignty is very limited. Though they might have escaped monetary colonialism in its overt and classical form, their domestic currencies are nevertheless under the tutelage of the IMF and global finance. In his own language, those countries do not possess a ‘national currency’, that is an articulated monetary, banking and financial system over which they have control and which works for the benefit of their national economic development within the framework of a ‘sovereign national project’.
The relevance of this view is probably vindicated by the experiences of Guinea, Mauritania and Madagascar. Although they left the franc zone, their formal monetary independence has not been conducive to a greater economic self-determination and to significant development outcomes. As former members of the franc zone, Morocco, Tunisia and Algeria might have been relatively more successful than the latter three and most of the countries that use the CFA franc. But they all share the challenge of having to delink from a pattern of extroverted development. Such delinking in turn requires the building of an anti-imperialist alliance committed to the interests of the largest segments of the working classes (peasants notably), an agenda that is in open conflict with the Washington Consensus policies advocated by the international financial institutions.
Interviewed before his death about the ongoing single currency project for the 15 West African countries, an initiative that should lead in principle to the abolition of the CFA franc, Amin said there is no functional currency without a state backing it, because money is a state’s instrument; without the prerequisite of a West African federal state, this single currency risks a more catastrophic fate than the euro, where, to use his own words, politicians had deliberately put the cart before the horse.8 Echoing Dembélé’s work (2011, 2015) on the preeminent and enduring role of Samir Amin, let us hope that African progressive forces will heed the warning of one whom it would not be an exaggeration to call the founder of radical political economy in Africa.