It has been almost twenty years because the world noticed the introduction of a brand new multinational foreign money bloc that will alter the sta
It has been almost twenty years because the world noticed the introduction of a brand new multinational foreign money bloc that will alter the stability of worldwide energy. Similar to the euro, a brand new foreign money is taking form that may examine in scope and imaginative and prescient. Solely this time, it’s occurring in Africa, and shockingly it’s not digital.
The West African Financial and Financial Union state international locations are presently in transition to adopt a brand new foreign money that will probably be utilized in a single market throughout a dozen or extra West African international locations — the Eco. Pegged to the euro, it’s designed to be a brand new fiat foreign money changing the present CFA Franc and will probably be in circulation in lots of West African international locations.
Nonetheless, whereas it’d examine in scope and imaginative and prescient, Eco’s mere existence isn’t sufficient to make sure a foreign money’s success or energy. Surprisingly, the Eco is a non-digital foreign money that’s being launched to extend the effectivity of cross-border commerce in West Africa. But in actuality, it’s nonetheless pegged to the euro, like its predecessor the CFA Franc. Relatively than transferring towards a real digital foreign money market and adopting African cryptocurrencies, the introduction of Eco seems to be a thinly veiled try at rexerting French colonial management over Francophone African economies with the launch of one other centralized foreign money from exterior of the continent.
The origin of Eco
The WAEMU was established in 1994 by eight French-speaking international locations in Western Africa. It’s a assortment of nations which have joined collectively in a customs union and foreign money union with a view to advance financial development. Its origins lie within the shared hope of selling financial integration in West Africa, which was enduring a cussed interval of financial development into the 1990s.
The present members of WAEMU are Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo. The first objective of WAEMU and the foreign money union underneath the CFA Franc is to create a typical market, coordinate insurance policies, and harmonize fiscal coverage amongst neighboring international locations to advertise safety, stability and prosperity.
The CFA Franc has been round in some type or different because the finish of WWII, and has pushed a persistent connection to France, their tradition and their financial system. Its backing by the French authorities has allowed the European energy to take care of a degree of affect in West African affairs, resulting in the top of colonial management and lengthening the area nicely into the 21st century.
Trendy historical past of francophone foreign money in Africa is dripping in blood. Three days after the primary President of Togo, Sylvanus Olympio, tried to print their very own foreign money in 1963 moderately than the French sponsored one, he was assassinated by an ex-French International Legionnaire. The president of Mali, Modiba Keita, launched a sovereign foreign money in 1962 and was deposed by an exFrench International Legionnaire, later dying in jail. Even just lately, in 2011, President Laurent Gbagbo of Cote D’Ivoire was deposed by French International Legionnaires for contemplating the identical factor, solely to be launched from European imprisonment with none correct fees or findings of guilt final yr.
As the previous Finance Minister of France Pierre Moscovici said in 2013:
“We have now to talk the language of fact: African development pulls us alongside, its dynamism helps us and its vitality stimulates us — we want Africa.”
Even the Italian Minister for International Affairs Luigi Di Maio was specific about this challenge in 2019 when he said:
“France above all, has by no means stopped colonising dozens of African international locations. If it wasn’t for Africa, France would rank 15th on the earth economies not within the prime six.”
Why Eco is doomed to fail
The Eco is solely one other iteration of the identical concept — storing the wealth and property of African economies in European banks and placing that wealth on their stability sheets, thereby persevering with to prop up European economies.
Sadly, the leaders accountable for creating the Eco are nonetheless proposing having it pegged to the euro and storing property in a number of European banks, as a substitute of simply in France. They haven’t gone far sufficient of their effort to permit West Africa a real independence, moderately than a continued subservience to the previous colonial overlords.
The Eco isn’t just a brand new foreign money, however a strategic device utilized by the French authorities and its allies to manage former colonies. The large scandal in all of this — 50 years after the supposed independence of those international locations — is that France nonetheless maintains a good grip over the currencies of the international locations that make up the CFA, and subsequently the Eco. France will nonetheless print the Eco in France and flow into them again to Africa to be used as fiat foreign money, which implies France will management the availability of foreign money in circulation and subsequently (if want be) swap the financial system off or on for “badly behaved” African nations.
The worth of African reserve property held in Paris are variously estimated at between $20 billion and $200 billion on unfavorable rates of interest. Which means…