2024-04-17 21:55:33
Will Bassirou Diomaye Faye’s Senegal be the first country to abandon the CFA franc? This is one of the new president’s key promises. But which he intends to carry out by taking his time.
Burying the CFA franc to regain its monetary sovereignty, breaking one of the last links of subjection with the former colonial power, is a very popular subject among West African youth. A gesture which would be very strong on the political level, but fraught with economic consequences. A sudden break might scare away investors and push the country into a financial crisis. Not really what Senegal needs. No more than the seven other countries sharing this currency. Even the three countries led by military juntas, Mali, Niger and Burkina Faso, have not dared to cross the Rubicon. They want to leave ECOWAS, the Community of West African States which sanctioned them, but for the moment there is no question of leaving the CFA. With the legitimacy of the ballot box, Diomaye Faye became a regional spokesperson for a movement that had until then been very popular in the streets, but not at all accepted at the leadership level.
The cautious approach favored by Diomaye Faye
However, he remains very cautious. He first wishes to consult with the countries concerned by the eco, the future common currency of West Africa. An approach consistent with the spirit of the CFA franc reform ratified in 2020 by Alassane Ouattara and Emmanuel Macron. The member countries of the franc zone then planned to abandon the CFA in favor of the eco. The deadline for the creation of the eco is set for 2027. It might still be pushed back, because discussions have been going on for thirty years. Everyone knows that reaching an agreement requires major efforts at economic and budgetary convergence between the fifteen countries concerned. If the conditions are not met at the regional level, “Senegal might consider the option of this national currency,” Cheikh Fatma Diop, who coordinated the Pastef economic program, told us. Beforehand, the economist explains, Senegal will have to clean up its public accounts by renegotiating its debt, improve the trade balance which is currently in deficit and build up gold reserves to guarantee the future currency. A process that will take several years.
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