From: matmcinn@nuscc.nus.sg (Brett McInnes)
Subject: Re: Money matters in Mali, Niger,Togo, etc
Organization: National University of Singapore
X-Newsreader: Tin 1.1 PL4
Date: Wed, 30 Dec 1992 03:13:58 GMT

f54oguocha@edison.usask.ca writes:
: controlled by france. in west africa(including Cameroon) the currency is
: called the CFA franc. the value of CFA franc in each country is a function
: of the country's economy but most of the time, france determines what
: value CFA franc assumes in each franco-phone country. usually, she tries to
: keep the value of CFA franc at par in all these countries. You see, france has
: a method of determining when to devalue the CFA franc used in Togo or
: Benin republic or Cameroon. Sometimes the system runs into trouble in that
: some countries may want their CFA franc devalued in order to help their
: governments pay workers's salaries and wages but France may hold another
: view. Well, as you would expect, France always has an upper hand. France
: does not want to lose hold of her former colonies and so she tries as
: much as possible to inject some new blood into these economies at critical
: times. if you are a regular reader of the "West Africa" magazine (published in
: London) or the "Newswatch" magazine (published in Lagos, Nigeria) you would
: have seen that CFA franc is often quoted without any reference to any particular
: franco-phone country. it is only the people in the sub-region that can tell
: you when the CFA issued by the central bank of Cameroon is stronger than that
: issued by the central bank of Benin republic.                          
: 
Thanks for your response. I have had several interesting responses. It
seems that the CFA franc is used by the following countries: Senegal,
Mali, Burkina Faso, Guinea, Togo, Benin, and Niger in one group, and Chad,
CAR, Cameroon, Equatorial guinea, Congo, and Gabon in another. The CFA
franc is related to the French franc, but people seem to disagree as to
whether the rate is rigidly set at 50fCFA=1fF or [as above] more loosely. 
 Some correspondents felt that it was excellent discipline for these
nations to have their exchange rate fixed in this way, others were more
critical of French motives. It was pointed out that economic policies are
essentially coordinated in all these places by one or two central banks,
which control money supply and try to avoid disparities that might cause
the system to break up.						           
I must say that I find this pretty amazing. Apparently this system has
worked rather well [anyone wish to dispute this?] since about 1960. Quite
a feat when one considers the failure of the Europeans to organise
something of this sort. One respondent contrasted this with the disasters
that have overtaken the currencies of Ghana and Nigeria.		  
 It was pointed out to me that Guinea and Mali left this system at one
point,but subsequently found it necessary to return. Furthermore,
Equatorial Guinea asked to join,though it is not Francophone [ They call
it the "Franco" according to one correspondent, though maybe he was
joking?] On the other hand, Mauritania has left for good.                 

Xref: sparky soc.culture.african:7250 alt.current-events.somalia:740