The “French Colonial Tax”: A misleading heuristic for understanding Françafrique

The story of former Guinean President, Sékou Touré’s referendum on whether to join the proposed Communauté Financière Africaine (CFA) monetary union in 1958 is an unpleasant chapter in the history of France’s relationship with its former colonial territories.

Following the 95% “no” vote, Charles de Gaulle’s government immediately pulled out more than 4,000 civil servants, judges, teachers, doctors, and technicians, instructing them to sabotage everything they left behind.

The ensuing maelstrom of burning books, demolished buildings, destroyed agricultural implements, and assorted vindictive behaviour by the departing French was summed up by French commentators as “un divorce sans pension alimentaire” – a divorce without alimony.

To 14 other newly independent French colonies however, the message was not that of a mere divorce. It was an example, illustrating the consequences of thumbing your nose at Paris is to risk losing everything.

Out of these inauspicious origins came the CFA Franc, a twin set of French-backed currencies used by eight West African countries and six Central African countries.

• Countries using CFA Francs are required to store 50% of their currency reserves with the Banque de France, and the currencies are pegged to the euro.

To some, this is a beneficial arrangement that ensures that such countries are shielded from the devastating impact of price inflation that sometimes happens in weak African economies that issue their own currency.

Many others, however, see it as a neocolonial tax, a brake on economic growth and an insult to the sovereignty of these 14 countries.

• According to this narrative, France – a European behemoth with a $2.5 trillion economy – is actively bullying 14 poor African countries and holding their economies hostage.

Benin’s President Patrice Talon has become the most prominent West African leader to openly express these sentiments, with a statement announcing that all 8 member countries of the West African CFA union are planning to pull out of it.

Predictably, the announcement sparked fist-pumping around the continent, presumably because it heralds the beginning of the end of a perceived exploitative, neocolonial relationship.

Is this the situation in reality?

Today’s France is not Charles de Gaulle’s France

A rather unhelpful effect of the framing around the CFA conversation is that France is often typecast as the quintessential colonial power hanging on to its empire by all means, which fits in neatly with the narrative of the CFA Franc being a tool for French neocolonial subjugation in the 21st century.

In fact, France is a remarkably different country now to what it was in the mid-20th century.

For one thing, the country’s ethnic and racial demographics have shifted significantly.

• A 2008 estimate in the New York Times put the number of black people in France at somewhere between 3 and 5 million people. Today’s France also has millions of people with North African origins, chiefly from Algeria, Tunisia, and Morocco.
• Exact figures are very difficult to come by because the French Constitution expressly forbids collection of ethnic demographic data, but it is not hard to see how the very meaning of what it is to be ‘French’ is a rather different thing to what it was in 1958.

France is also witnessing a wave of rightwing populist politicians who make immigration and racial identity the core of their message. From being fringe figures barely a decade ago, French far-right politicians like Marine Le Pen now sit in the country’s National Assembly.

These politicians generally do not sell an expansionist, imperial vision of France to their growing audiences, but instead sell a nativist, inward-looking vision of France that portrays African immigration as an existential threat and depicts Francophone Africa as an economic and cultural deadweight that France should cut loose.

Le Pen famously used the CFA Franc as a campaign issue during a visit to Chad while running for President in 2017.

• If elected, she promised to ensure that the currency is abolished and Francophone African countries are given “greater sovereignty” to relate with France on their own terms.

Her growing election numbers show that is becoming politically tricky even within France to keep the CFA union running – keeping Africans under their thumb is clearly no longer something that captures the popular French imagination.

Extrapolating election results over the past decade and a half, it is safe to assume that at some point in the next decade, a majority of French voters may actually prefer to get rid of the CFA altogether if it means controlling African immigration from a position of detachment as the British do.

The local politicians in Africa who have seized on the “CFA colonial tax” narrative in the time-honoured tradition of empty populist rhetoric are aware of this, but their audiences by and large are not.

Forget France: Nigeria is the Real Game in Town 

Another feature of the CFA discourse is that it severely overstates the amount of French influence in Francophone West and Central Africa.

While former French colonies undoubtedly maintain close business and political links with France for obvious economic and historical reasons, it is not the case that their economies are run on a colonial model, with every major decision passing through Paris – or at least that is no longer the case.

A visit to downtown Abidjan may still sometimes feel like an expatriates meeting, but a trip through the countryside and inner cities reveals one universal fact – Nigerians are everywhere.

French involvement in these economies is in finance and commodity trading, alongside ports, telecoms and infrastructure.

But they are no longer the only game in town however, with Nigerian and Chinese investment in retail, construction, entertainment, and manufacturing among others driving economic growth in these countries.

It is no coincidence that Patrice Talon’s pronouncement comes at a time when he is facing severe pressure from the Beninese business lobby as a result of Nigeria’s land border closure.

Where a giant with real power over Benin’s economy is acting recklessly, he has refrained from publicly criticising Nigeria entirely. The CFA Franc then offers itself as the perfect political punching bag.

It is convenient because it is a silent, almost abstract target that never talks back or imposes sanctions. It is also suitably emotive from a populist point of view – it has its basis in French colonisation and bad faith actions in 1958, ergo it must be a bad thing in 2019.

Rather than deal with Benin’s real economic problem – near total dependence on trade with Nigeria – Talon calculates that going after the CFA Franc and with a grand announcement that says nothing of any real substance will boost his political capital. Judging by the responses to his pronouncement, he calculated correctly.

Kikelomo Shodeko, a West Africa analyst at Salama Fikira, a corporate security and risk management company agrees with this assessment.

She believes that Talon’s announcement is little more than political grandstanding with no real intention of taking any dramatic action.

In her words:

• “They can rattle the sabre, but the reality is different. The reality is – what will the currency be based on? There is no infrastructure in place. The organised private sector in these countries is tiny and overtaxed. They can huff and puff, but they simply cannot blow the house down as things stand. If adequate infrastructure existed to support this mooted migration away from the CFA however, it is very possible. Over a period of years, these governments would have supported the growth of new economic sectors and reduced their reliance on aid from Europe or America. Naming the new currency would be followed immediately by consultations with financial analysts on the matter of withdrawing the CFA’s currency reserves saved in the Banque de France. Without these things in place, none of this huffing and puffing seems real.”

Leaving the CFA Union: From Frying Pan to Fire?

Getting off the euro peg and diving fully into the proposed West African currency comes with its own significant risks. Right now for example, the exact rules governing the existence of the eco – the proposed name for the West African Monetary Zone’s currency – do not exist.

Unlike the euro which has the ECB, the eco has no equivalent West African central bank a year to its proposed launch. There is also no comprehensively ratified commitment to the rules of such a union.

So far, the worst populist instincts of the leaders in some of these jurisdictions have been tempered by France. What is the guarantee that unilateral rule-breaking will not become the norm in the absence of the man with a big stick?

Then there is the small matter of increased exposure to Nigeria’s economy and sphere of influence.

Currently, Nigeria alone makes up a little over 25% of West Africa’s total annual economic output.

• Nigeria is also the country that uses unilateral border closures as a blunt force instrument of economic policy, in contravention of the regional and continental free trade agreements it signs.
• Its currency sometimes swings wildly, losing more value in a single week than the euro-pegged CFA loses in decades.
• It has a history of ignoring ECOWAS court orders and someone in Talon’s camp recently described Nigeria as “a giant who does what he wants.”

Is the idea to get rid of the perceived oppressive colonial weight of France only to end up subject to the demonstrably oppressive weight of an erratic, unstable and often unfriendly neighbour?