Created 74 years ago, the CFA franc is the subject of passionate debates about its role, its usefulness, or its harmfulness for
African economies. At a time when its reform is being debated, most of the CFA franc in 5 points.
COMMON CURRENCY OF 14 AFRICAN COUNTRIES
The CFA franc is the common currency of 14 west and central African countries, with a total of 155
million inhabitants.
It was created on December 26, 1945, about fifteen years before the independence of the French colonies. Il
is then called "franc des colonies françaises d'Afrique".
It will then take the name of "franc of the African Financial Community" for Africa of
West and "Franc of Financial Cooperation in Central Africa" for Central Africa.
The countries using the FCFA are divided into two zones, eight in West Africa, six in Central Africa,
constituting two separate monetary unions:
- Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo
constitute the West African Economic and Monetary Union (WAEMU), whose issuing institute is the Central Bank of West African States (BCEAO), established in 1962 and headquartered in Dakar.
- Cameroon, Central African Republic, Congo, Gabon, Equatorial Guinea and Chad constitute the
Economic and Monetary Community of Central Africa (CEMAC), whose issuing Institute is the Bank of Central African States (BEAC), created in 1972 and headquartered in Yaoundé.
LINK WITH FRANCE AND EURO
The value of the FCFA, previously indexed to the French franc, is pegged to the euro, with a fixed parity.
1 euro = 655.96 CFA.
Half of the foreign exchange reserves of countries using the CFA franc are deposited with the Bank of
France.
The France does not make money from these deposits. The Bank of France currently remunerates these deposits
at the floor rate of 0.75% per year. Interest is returned to African countries each year.
This deposit guarantees unlimited convertibility of the FCFA with euro.
There is total freedom of transfers between the countries of each Franc Zone.
FCFA coins and notes are minted in a banque de France printing house in Chamalières,
in the suburbs of Clermont-Ferrand, in the center of the France.
OBJECTIVE : STABILITY
"The priority objective of the BCEAO's monetary policy is to ensure price stability" (source
BCEAO).