Chad and the FCFA

[eurocoin]

Chad calls upon African countries to mint their own coins and to get rid of the Franc CFA

"We have the possibility to mint the coins as we want. Today the Franc CFA is paper. Within 2 years it will be scrap-paper, people better shouldn't use it.", says the president of Chad, Idriss Déby.

President Idriss Déby is sure that Africa can't evolve with the Franc CFA. He has made this clear during a press conference in Abéché, the second largest city of Chad where the 55th anniversary of independence was being celebrated.

"The relations between Africa and Chad are historic and ancient. The first president of Chad, François Tombalbaye, has made clear during the event that Chad is independent and sovereign. This is something that we welcome. We can't completely deny the relations that we have with France, but we can't continue the French-African system or the paternalism system, that are both outdated. That is something that France doesn't want either. Africans, we are the ones that lose, who do you want to blame for that?", highlighted the President. "It is a coureagous decision that our French friends need to take."

The CFA is a currency guaranteed by the French treasury, which is not convertible with other international currencies.

"Today we have the FCFA that is guaranteed by the French treasury. But that currency is African. It is our currency. In fact we need to make this currency ours, only then we will be able to make the currency convertible which will make it possible for all African countries that currently use the FCFA to develop."

"Africa, the surrounding area and francophone African countries are the countries that I call upon today. The monetary cooperation with France has some clauses that are outdated. These clauses should be reviewed. It is in the intrest of both France and Africa. These clauses capitalize the African economy, these clauses don't allow the African economy to develop. In our heart we continue the friendship with France. Courage is needed to confess that the time has come to cut the cord that prevents Africa from developing. It is not a gift question. No head of state, no minister, no African should make this issue there is a gift question. It raises the question wether the FCFA is really our currency. Why is our currency not convertible. Why do all exchanges have to pass through the central bank of France. What is the interest that we receive? Africa has to mint its own currency."

"We have the possibility to mint our own currency as we want. Today the Franc CFA is paper, within 2 years it will be scrap-paper. People better shouldn't use it. It is expensive to mint a currency, African countries should have the possibility to award the minting of currency to the best tenderer. This question is not a taboo. People who think the question is a taboo, kill Africa and tomorrow they are condemmed by future generations", concluded president for 26 years, Idriss Déby.

[Figleaf]

This is crap. Let there be no mistake. This is about the money supply. It is not about who prints the notes and mints the coins. It sounds like frustration with being unable to spend as much as you'd like and let the poor suffer through inflation. It sounds like wanting bigger shady bank accounts.

If there is a paramount lesson about fiat currency it is that you can't expand money quantity indefinitely. We know quite well that tin pot dictators (Margaret Thatcher's finest quote) find it easy to control central banks, while they ought to be independent and disciplined and untouchable. The CFA franc is indeed a colonial relic, but it is also what stands between the get-rich-quickly bloodsuckers that call themselves African presidents and their shady, oedemaniac bank accounts. It is a minimum of social justice in a continent drenched in graft. Any call to end it before African countries have trustworthy central banks is a call to transfer wealth from the African poor to the political elite of the day. Yuck!

Peter

[Afrasi]

Hmmm ..., Mr. Déby!

So why Mali turned back to the Franc CFA after its desastrious try to do it the own way?
And why did Guinea Ecuatorial as a former Spanish colony join the zone of the Franc CFA?

Proudness is a good thing, but sometimes it can make blind.

[Enlil]

This is crap. Let there be no mistake. This is about the money supply. It is not about who prints the notes and mints the coins. It sounds like frustration with being unable to spend as much as you'd like and let the poor suffer through inflation. It sounds like wanting bigger shady bank accounts.

If there is a paramount lesson about fiat currency it is that you can't expand money quantity indefinitely. We know quite well that tin pot dictators (Margaret Thatcher's finest quote) find it easy to control central banks, while they ought to be independent and disciplined and untouchable. The CFA franc is indeed a colonial relic, but it is also what stands between the get-rich-quickly bloodsuckers that call themselves African presidents and their shady, oedemaniac bank accounts. It is a minimum of social justice in a continent drenched in graft. Any call to end it before African countries have trustworthy central banks is a call to transfer wealth from the African poor to the political elite of the day. Yuck!

Peter

The dictators are rich anyway, and the poor still suffer. This is about nationalisnm and control.

[Pabitra]

The CFA is a currency guaranteed by the French treasury, which is not convertible with other international currencies.

A currency union always enforces discipline of fiscal nature on members of the Union.
Some members dislike it whereas others prosper in it.

CFA Franc is pegged to French currency. Since earlier, French Currecy was Franc, the non convertibility clause could have been constricting. This is no longer true since the pegging by French Treasury is with Euro and Euro is a much more active Currency.

Pegging always leads to flight of capital since inefficiency does not lead to devaluation.
To that extent, it may be that some members are growing in this Union whereas Chad may be a weaker partner and hence losing.
A loosing partner will always threaten to topple the cart but never go ahead doing it.