An Analysis of Trade Relations and Aid Flows in the CFA Franc Zone

Open Access
Author:
Copley, Amy Elizabeth
Area of Honors:
French and Francophone Studies
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Thomas Albert Hale, Thesis Supervisor
  • Thomas Albert Hale, Honors Advisor
  • Jennifer Boittin, Faculty Reader
Keywords:
  • Monetary Union
  • Francophone Africa
  • France
  • Europe
  • Trade
  • Foreign Aid
Abstract:
As former French West and Central African colonies gained their independence en masse in 1960, a degree of sovereignty was transferred from the former French colonial administration to the succeeding African governments. To the international community, this wave of independence seemed to indicate French withdrawal from Africa and the beginning of true economic and political autonomy for the nascent states. However, during the process of decolonization, several mechanisms of colonial invention persisted, including the Communauté Financière Africaine (CFA) Franc Zone, a monetary union arranging former French colonies into two regional groups with currencies pegged to the French franc. The performance and structural organization of the zone are still widely debated to this day. While the CFA Franc Zone has afforded the former French colonies that comprise its membership greater access to the global economy by ensuring direct convertibility with the French franc, it has also rendered the zone more vulnerable to economic perturbations in the global environment. This is increasingly true since France’s adhesion to the European Economic and Monetary Union (EMU) and its adoption of the euro as its official currency, which led the CFA franc to shift from a peg to the franc to the euro in 1999. The following paper will examine how European political and economic integration, and the CFA franc’s shift from a peg to the French franc to the euro, have influenced trade and aid relations between France and the CFA Franc Zone. It will analyze International Monetary Fund (IMF) and Organization for Economic Cooperation and Development (OECD) data on trade and aid flows from 1980 to 2010, with an emphasis on the period surrounding the 1999 implementation of the euro. A discussion of the implications for France, Europe and Francophone Africa of maintaining the CFA franc peg to the euro will conclude the paper.