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What can France do to prevent West African countries from ditching the CFA Franc?

https://www.aljazeera.com/ajimpact/african-currency-eco-replace-cfa-franc-190711162229142.html

Leaders from eight West African countries met in Abidjan, Ivory Coast on Friday to discuss ditching their currency - the CFA franc - for the "ECO", a new currency that leaders of the 15-member Economic Community of West African States (ECOWAS) aim to launch next year.

Would the adoption of a new currency affect France's financial power? which isn't good for France. What can France do to prevent these West African countries from ditching their currencies? Is going to war an option for France?

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    This question contains an unwarranted assumption: "The adoption of a new currency would really hurt France's financial power, which isn't good for France." Please provide a source describing how France's financial power is enhanced by the existence of the CFA Franc. – phoog Aug 13 at 20:51
  • Please edit your question and remove the speculative part. France switches to Euro since 1999 and stops using Franc since 2002. The CFA_franc conversion is mostly legacy remains of the colonisation, no new CFA_franc is issued and has nothing to do with current-day France fiscal and monetary policies. – mootmoot Aug 14 at 14:18
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    I was curious and read a few news articles in the French media about this topic. I found no evidence at all that France opposes this change, let alone that its financial power would be hurt. Macron said "we can talk about it with our African partners in an open way". The main discussion is about the economic advantages and disadvantages, and the importance of the political symbol. – Erwan yesterday
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What I won't discuss:

I don't intend to write on all potential actions open to France. If you assume that even war is a plausible response, then you could mention an infinite number of other options.

Wrong basic assumption:

Your basic assumption The adoption of a new currency would really hurt France's financial power is wrong. Many people would perceive the disappearance of the CFA Franc as another symbol for the decline of French influence in the so-called Francafrique. However, the direct economic impact would be small, almost negligible. The most tangible benefit for France is the obligation of CFA Franc members to deposit 50 % of their national reserve money in the French treasury. This sounds like a great advantage, but in practice it's of no great importance (BBC article, already cited in a related question):

In December 2017, the central banks of West Africa and Central Africa had €5bn (£4.3bn) and €3.9bn in the French treasury, respectively.

This is a small amount compared with total French public debt, which stood at about €2.2trillion in 2017.

How much does France possibly gain? France pays 0.75 per cent of interest on the deposited money. You can calculate how much more it would have to pay, if it had to obtain the same amount of money by selling sovereign bonds of a certain maturity. At current interest rates - even if the deposits were several times larger - there wouldn't be any reason for France to care, much less to feel threatened by the abolition of the CFA Franc.

Other consequences:

The loss of the peg between Euro (or previously French Franc) and the Franc CFA could still have real economic consequences. If the currency risk increases, this could have a negative impact on trade, investment decisions, savings of African citizens in France or Europe (and theoretically vice-versa). However, if you ignore its closer economic ties to the region, France is as much concerned as any other country in the Euro zone

What France will do:

French diplomats will certainly continue to promote the CFA Franc as guarantor of economic stability (absence of monetary crises, like those in Argentina or Zimbabwe) and raise questions about the prospects of a new currency and its advantages.

Currency pegs never a good thing?

Mainly as a response to a user comment to another proposed answer:

This answer is extremely simplistic in many ways. Importantly, France gave up independent monetary policy a long time ago. It's true that a currency pegged to that of a larger economic area is not a good thing but that's exactly the situation France is now with respect to Germany. The CFA Franc hardly benefits the country and is mostly a symbolic curiosity.

I consider this answer itself extremely simplistic. It's true that a currency pegged to that of a larger economic area is not a good thing is wrong. It may be correct in a specific case, but it's not unquestionably true.

There is a strong incentive for smaller economies to peg their currency to another currency belonging to a larger economy, whether the US Dollar, French Franc (CFA Franc!), Deutsche Mark (e.g., Austria, Bulgaria), Euro or others (see List of circulating fixed exchange rate currencies). Historically, countries had their currency pegged to gold or silver, which was equally outside of control by "monetary policy". Many countries voluntarily maintain their currency pegged to that of other countries, notwithstanding Argentina or other examples. Even now, the CFA Franc member countries don't want to create local, national money - but a new supranational currency outside of their control!

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CFA Franc is a colonial currency. The real question is, are we really done with colonization while countries are still using colonial currencies ?

Economically talking, there are no financial advantages keeping CFA Franc in these countries. It is just a matter of diplomacy.

The message is clear though. Africa and its riches are the target of countries of the North (USA, China, France, Russia) which see in this continent the future. Everyone wants to get their share of the pie, and France clearly does not want to lose its African partners in this story.

That is for me the only reason CFA Franc still exists. Pretending to keep the stability of these countries is just a pretext to hide the fact that these countries are indirectly still French colonies.


EDIT :

To clearly answer the question, France has a valuable argument that she has maintained since the beginnings of the colonial era. In the consciousness of African policies, the CFA franc governs the smooth running of things, France vouching for these countries.

In the event of a military conflict, France can likewise provide its non-negligible support to these countries.

Finally, the last major point, there is a certain hierarchy within the African Union, in which the Maghreb countries and in particular Morocco is seen as the "French supervisor" of Africa continent. France can use its privileged relations with Morocco to put pressure and maintain its ambitions, knowing that the King of Morocco has good relations with his African neighbors.

There is no bias in this answer. This is the way things work.

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    Although this is a well-reasoned opinion, which is supported by considerable additional evidence, this post does not answer the question: "What can France do to prevent West African countries from ditching the CFA Franc?" – Jasper Aug 13 at 16:47
  • I understand your remark. It is very difficult to answer such a question without being biased. But this is how the political debate in France works. Actually, I answered the question, France uses the pretext of chaos as a lever. I'll edit – Kenichi-san Aug 14 at 6:45
  • This is definitely now how currency and monetary policies work. – mootmoot Aug 14 at 16:31
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    This answer is extremely simplistic in many ways. Importantly, France gave up independent monetary policy a long time ago. It's true that a currency pegged to that of a larger economic area is not a good thing but that's exactly the situation France is now with respect to Germany. The CFA Franc hardly benefits the country and is mostly a symbolic curiosity. – Relaxed Aug 14 at 20:15
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    Military influence is much more important and some of the states in the list (especially Mali, Niger and Côte-d'Ivoire) are weaker than they have ever been. That's unlikely to change in the near future and France does not depend on the CFA Franc in any way to further its interests in the area. Incidentally, it's odd to write "in the event" of a military conflict when that's exactly what has been happening for the last 10 years. – Relaxed Aug 14 at 20:16

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