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Towards a political economy of monetary dependency: The case of the CFA franc in West Africa

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  • Koddenbrock, Kai
  • Sylla, Ndongo Samba

Abstract

This paper focuses on the most neglected case of monetary dependency: the CFA franc. This currency arrangement was born in 1945, during the colonial era, but it still operates in the same ways more than 70 years later in fourteen countries in Africa, mostly former French colonies. Engaging with the seminal African scholarship by Joseph Pouemi on internal and external monetary repression and the emergent literature on "financial subordination," we introduce the notion of the "chain of monetary dependency," consisting of an external and an internal part. We argue that the CFA franc provides an extreme but paradigmatic example of this chain. The CFA franc is paradigmatic because of the very strong external repression of monetary and financial policy through US dollar and euro dependence. Internally, the CFA franc arrangement radicalizes the constraints imposed on all central bank policies and bank-firm relations in the Global South and makes it more difficult to pursue growth strategies geared towards the well-being of the broader population.

Suggested Citation

  • Koddenbrock, Kai & Sylla, Ndongo Samba, 2019. "Towards a political economy of monetary dependency: The case of the CFA franc in West Africa," MaxPo Discussion Paper Series 19/2, Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo).
    • Handle: RePEc:zbw:maxpod:192
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    Cited by:

    1. Francisco J. Pérez, 2022. "An Enduring Neocolonial Alliance: A History of the CFA Franc," American Journal of Economics and Sociology, Wiley Blackwell, vol. 81(5), pages 851-887, November.
    2. Villalba, Roberto & Venus, Terese E. & Sauer, Johannes, 2023. "The ecosystem approach to agricultural value chain finance: A framework for rural credit," World Development, Elsevier, vol. 164(C).
    3. Kohnert, Dirk, 2023. "Will the UEMOA survive the rise of anti-French sentiment in West Africa?," MPRA Paper 118357, University Library of Munich, Germany.
    4. Kohnert, Dirk, 2023. "L'UEMOA, survivra-t-elle à la montée du sentiment anti-français en Afrique de l'Ouest ? [Will the UEMOA survive the rise of anti-French sentiment in West Africa?]," MPRA Paper 118358, University Library of Munich, Germany.
    5. Babatounde Ifred Paterne Zonon, 2021. "Regional Stock Exchange Development and Economic Growth in the Countries of the West African Economic and Monetary Union (WAEMU)," Economies, MDPI, vol. 9(4), pages 1-19, November.

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    Keywords

    CFA franc; colonialism; dependency; monetary sovereignty; money; West Africa;
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