Really good article! A couple things to point out:
1. It's not just inflation that these countries are worried about, but also borrowing in foreign currency. President Ouattara of Ivory Coast explicitly said he likes the CFA franc because he doesn't have to worry about foreign exchange depreciation risk when he borrows in Euros. Meanwhile, my country Ghana just defaulted on a eurobond in December 2022.
Ouattara "“The fact that we are pegged to the euro, if we borrow euros, by the time to repay them in five or 10 years, the rate is fixed, it is thanks to this fixed parity."
2. My concern with the replacing the CFA franc is what comes after. Some of these countries run chronic current account deficits, and even the idea of devaluating your currency to export more wouldn't fly with the populace most of these countries have terrible subsistence agricultural food yields and import all their food needs. There would be (and have been) riots from currency devals.
Countries that have chronic current account deficits in the CFA franc: Senegal, Mali, Niger, Benin, Togo,
Countries that have had occasional surpluses: Cameroon, Burkina Faso, Guinea-Bissau, Congo-Brazzaville, Gabon
I wonder what you think about some countries casting off French as an official language. Will AI make it easier to produce literary materials in smaller languages so that it becomes easier to do Cuba-style mass literacy programs in manylingual countries?
Interesting article. Would it look any different if the growth graph continued to 2024? I'm looking at the top African countries for growth in 2024: Niger (11.2%), Senegal (8.2%), Libya (7.9%), Rwanda (7.2%), Cote d'Ivoire (6.8%), Ethiopia (6.7%), Benin (6.4%), Djibouti (6.2%), Tanzania (6.1%), Togo (6%). Half of these are West African CFA countries, including the top two. Senegal and Cote d'Ivoire in particular have had strong consistent growth in recent years, and latter is one of the strongest global economic performers over the past 15 years. I do wonder how much West Africans in the XOF zone would really want the inflation levels of Nigeria, Ghana or Sierra Leone.
Really good article! A couple things to point out:
1. It's not just inflation that these countries are worried about, but also borrowing in foreign currency. President Ouattara of Ivory Coast explicitly said he likes the CFA franc because he doesn't have to worry about foreign exchange depreciation risk when he borrows in Euros. Meanwhile, my country Ghana just defaulted on a eurobond in December 2022.
Ouattara "“The fact that we are pegged to the euro, if we borrow euros, by the time to repay them in five or 10 years, the rate is fixed, it is thanks to this fixed parity."
https://www.bloomberg.com/news/articles/2019-12-04/ivory-coast-president-defends-cfa-franc-as-peers-seek-change
2. My concern with the replacing the CFA franc is what comes after. Some of these countries run chronic current account deficits, and even the idea of devaluating your currency to export more wouldn't fly with the populace most of these countries have terrible subsistence agricultural food yields and import all their food needs. There would be (and have been) riots from currency devals.
Countries that have chronic current account deficits in the CFA franc: Senegal, Mali, Niger, Benin, Togo,
Countries that have had occasional surpluses: Cameroon, Burkina Faso, Guinea-Bissau, Congo-Brazzaville, Gabon
https://data.worldbank.org/indicator/BN.CAB.XOKA.CD?locations=SN-CM-TD-ML-BF-NE-BJ-TG-GW-CG-CF-GA
I wonder what you think about some countries casting off French as an official language. Will AI make it easier to produce literary materials in smaller languages so that it becomes easier to do Cuba-style mass literacy programs in manylingual countries?
Interesting article. Would it look any different if the growth graph continued to 2024? I'm looking at the top African countries for growth in 2024: Niger (11.2%), Senegal (8.2%), Libya (7.9%), Rwanda (7.2%), Cote d'Ivoire (6.8%), Ethiopia (6.7%), Benin (6.4%), Djibouti (6.2%), Tanzania (6.1%), Togo (6%). Half of these are West African CFA countries, including the top two. Senegal and Cote d'Ivoire in particular have had strong consistent growth in recent years, and latter is one of the strongest global economic performers over the past 15 years. I do wonder how much West Africans in the XOF zone would really want the inflation levels of Nigeria, Ghana or Sierra Leone.