The French Treasury is holding billions of dollars owned by the
African states of the francophone nations of West and Central Africa
in its own accounts and invested in the French Bourse. The Africans
deposit the equivalent of 85%of their annual reserves in these
accounts as a matter of post-colonial agreements and have never been
given an accounting for how much the French are holding on their
behalf, in what have these funds been invested, and what profit or
loss there have been. The French have been acquiring and holding the
national reserves of fourteen countries since 1961. Even allowing
for losses and expenditures in keeping the CFA franc viable, the
French are holding about at least four hundred billion dollars of
African money, wholly unaccountably to the money's putative owners,
the African states. Even Bernie Madoff couldn't have constructed a
Ponzi scheme that large without being exposed.
This "bargain' was made between the African former colonies and the
French as part of the Pacte Coloniale which accompanied their
independence and controlled through a single currency, the CFA
franc... This was largely the work of the French presidential
adviser, Jacques Foccart. Jacques Foccart was the chief adviser for
the government of France on African policy as well as the co-founder
of the Gaullist Service d'Action Civique (SAC) in 1959 with Charles
Pasqua, which specialized in covert operations in Africa.
It was Foccart "the eminence grise" who negotiated the Pacte
Coloniale with the evolving French West African states who achieved
their "flag independence " in 1960. Not really having planned for
it, in 1960 de Gaulle had to improvise structures for a collection
of small newly independent states, each with a flag, an anthem, and
a seat at the UN, but often with precious little else. It was here
that Foccart came to play an essential role, that of architect of
the series of Cooperation accords with each new state in the sectors
of finance and economy, culture, education, and the military. There
were initially eleven countries involved: Mauritania, Senegal, Cote
d'Ivoire, Dahomey (now Benin), Upper Volta (now Burkina Faso),
Niger, Chad, Gabon, Central African Republic, Congo-Brazzaville, and
Madagascar. Togo and Cameroon, former UN Trust Territories, were
also co-opted into the club. So, too, later on, were Mall and the
former Belgian territories (Ruanda-Urundi, now Rwanda and Burundi,
and Congo-Kinshasa), some of the ex-Portuguese territories, and
Comoros and Djibouti, which had also been under French rule for many
years but became independent in the 1970s. The whole ensemble was
put under a new Ministry of Cooperation, created in 1961, separate
from the Ministry of Overseas Departments and Territories (known as
the DOM-TOM) that had previously run them all.
The key to all this was the agreement signed between France and its
newly-liberated African colonies which locked these colonies into
the economic and military embrace of France. This Colonial Pact not
only created the institution of the CFA franc, it created a legal
mechanism under which France obtained a special place in the
political and economic life of its colonies.
The Pacte Coloniale Agreement enshrined a special preference for
France in the political, commercial and defence processes in the
African countries. On defence it agreed two types of continuing
contact. The first was the open agreement on military co-operation
or Technical Military Aid (AMT) agreements, which weren't legally
binding, and could be suspended according to the circumstances. They
covered education, training of servicemen and African security
forces. The second type, secret and binding, were defence agreements
supervised and implemented by the French Ministry of Defence, which
served as a legal basis for French interventions. These agreements
allowed France to have pre-deployed troops in Africa; in other
words, French army units present permanently and by rotation in
bases and military facilities in Africa; run entirely by the French
(and, incidentally, paid for by the Africans),.
In summary, the colonial pact maintained the French control over the
economies of the African states; it took possession of their foreign
currency reserves; it controlled the strategic raw materials of the
country; it stationed troops in the country with the right of free
passage; it demanded that all military equipment be acquired from
France; it took over the training of the police and army; it
required that French businesses be allowed to maintain monopoly
enterprises in key areas (water, electricity, ports, transport,
energy, etc.). France not only set limits on the imports of a range
of items from outside the franc zone but also set minimum quantities
of imports from France. These treaties are still in force and
operational.
One of the most important influences in the economic and political
life of African states which were formerly French colonies is the
impact of a common currency; the Communuate Financiere de l'Afrique
("CFA') franc. There are actually two separate CFA francs in
circulation. The first is that of the West African Economic and
Monetary Union (WAEMU) which comprises eight West African countries
(Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger,
Senegal and Togo. The second is that of the Central African Economic
and Monetary Community (CEMAC) which comprises six Central African
countries (Cameroon, Central African Republic, Chad,
Congo-Brazzaville, Equatorial Guinea and Gabon), This division
corresponds to the pre-colonial AOF (Afrique Occidentale Franà §aise)
and the AEF (Afrique Ã"degreesquatoriale Franà §aise), with the exception that
Guinea-Bissau was formerly Portuguese and Equatorial Guinea
Spanish).
Each of these two groups issues its own CFA franc. The WAEMU CFA
franc is issued by the BCEAO (Banque Centrale des Etats de l'Afrique
de l'Ouest) and the CEMAC CFA franc is issued by the BEAC (Banque
des Etats de l'Afrique Centrale). These currencies were originally
both pegged at 100 CFA for each French franc but, after France
joined the European Community's Euro zone at a fixed rate of 6.65957
French francs to one Euro, the CFA rate to the Euro was fixed at CFA
665,957 to each Euro, maintaining the 100 to 1 ratio. It is
important to note that it is the responsibility of the French
Treasury to guarantee the convertibility of the CFA to the Euro.
The monetary policy governing such a diverse aggregation of
countries is uncomplicated for African Central Banks because it is,
in fact, operated by the French Treasury, without reference to the
central fiscal authorities of any of the WAEMU or the CEMAC. Under
the terms of the agreement which set up these banks and the CFA the
Central Bank of each African country is obliged to keep at least 65%
of its foreign exchange reserves in an "operations account" held at
the French Treasury, as well as another 20% to cover financial
liabilities.
The CFA central banks also impose a cap on credit extended to each
member country equivalent to 20% of that country's public revenue in
the preceding year. Even though the BEAC and the BCEAO have an
overdraft facility with the French Treasury, the drawdowns on those
overdraft facilities are subject to the consent of the French
Treasury. The final say is that of the French Treasury which has
invested the foreign reserves of the African countries in its own
name on the Paris Bourse.
In short, more than 80% of the foreign reserves of these African
countries are deposited in the "operations accounts" controlled by
the French Treasury. The two CFA banks are African in name, but have
no monetary policies of their own. The countries themselves do not
know, nor are they told, how much of the pool of foreign reserves
held by the French Treasury belongs to them as a group or
individually. The earnings of the investment of these funds in the
French Treasury pool are supposed to be added to the pool but no
accounting has ever been given to either the banks or the countries
of the details of any such changes. The limited group of high
officials in the French Treasury who have knowledge of the amounts
in the "operations accounts", where these funds are invested;
whether there is a profit on these investments; are prohibited from
disclosing any of this information to the CFA banks or the central
banks of the African states.
This makes it impossible for African members to regulate their own
monetary policies. The most inefficient and wasteful countries are
able to use the foreign reserves of the more prudent countries
without any meaningful intervention by the wealthier and more
successful countries. Most importantly, the French Government uses
these funds on deposit in France as assets of France. The CFA franc
devaluation of 50 per cent against the French franc in January 1994
was a great surprise to several of the African states and caused
major problems for them.
The problems for the African states are growing. The coming crisis
in the Euro, with the bailouts of Greece, Portugal and others will
have a strong effect on the value of the Euro. With the CFA franc
pegged to the Euro the value of the CFA will decline with it. The
cost of commodities (petroleum products, foodstuffs, etc.) priced in
dollars will grow to be a heavier burden on the African economies.
Moreover, France itself is in deep financial trouble.
The International Monetary Fund has warned this week that France
will have to carry out more spending cuts to ensure it reaches its
deficit reduction commitments amid lower-than-expected growth
expectations. While France has predicted 2.25 per cent growth for
2012, the IMF has downgraded this to 1.9 per cent next year.
The French are spending almost US$2 million a day bombing Libya;
above the budgeted expenditure in its defence budget. France is very
short of money. However, the cost of massacring Ivoirians, using
tanks, helicopter gunships and Special Forces were offset against
the Ivory Coast money it was holding so didn't add to the budgetary
problems. The killing of Africans in the Ivory Coast, Cameroons,
Rwanda, Chad and the Central African Republic have never been the
subject of a budget request to the French defence budget as the
Office of the President deducts these from the tranche at the
Treasury (which is why it has never been debated in the French
National Assembly). To add insult to injury the French estimated
that the French business community had lost several millions of
dollars when, in the rush to leave Abidjan in 2006 when the French
Army massacred 65 unarmed civilians and wounded 1,200 others, the
French lost money as they feared the revenge of the Ivoirians, The
French demanded that the Ouattara government which they had
installed paid them compensation for these putative losses. Indeed
the Ouattara government paid them twice what they said they had lost
in leaving.
Surely the time has come for the francophone governments to ask the
French for a proper accounting of the money they are holding.
Perhaps the next government in the Ivory Coast which will succeed
Ouattara's assassination or defeat at the polls will ask the French
for an accounting. Wade in Senegal has asked but was never answered.
The solution seems simple. Until the French give a proper accounting
for Africa's billions the African states should stop sending more to
them. It is bad enough paying their overseer for the cost of his
whip used to chastise them. It is wholly unreasonable to continue to
do so when there is no upside, only potential losses.
African states of the francophone nations of West and Central Africa
in its own accounts and invested in the French Bourse. The Africans
deposit the equivalent of 85%of their annual reserves in these
accounts as a matter of post-colonial agreements and have never been
given an accounting for how much the French are holding on their
behalf, in what have these funds been invested, and what profit or
loss there have been. The French have been acquiring and holding the
national reserves of fourteen countries since 1961. Even allowing
for losses and expenditures in keeping the CFA franc viable, the
French are holding about at least four hundred billion dollars of
African money, wholly unaccountably to the money's putative owners,
the African states. Even Bernie Madoff couldn't have constructed a
Ponzi scheme that large without being exposed.
This "bargain' was made between the African former colonies and the
French as part of the Pacte Coloniale which accompanied their
independence and controlled through a single currency, the CFA
franc... This was largely the work of the French presidential
adviser, Jacques Foccart. Jacques Foccart was the chief adviser for
the government of France on African policy as well as the co-founder
of the Gaullist Service d'Action Civique (SAC) in 1959 with Charles
Pasqua, which specialized in covert operations in Africa.
It was Foccart "the eminence grise" who negotiated the Pacte
Coloniale with the evolving French West African states who achieved
their "flag independence " in 1960. Not really having planned for
it, in 1960 de Gaulle had to improvise structures for a collection
of small newly independent states, each with a flag, an anthem, and
a seat at the UN, but often with precious little else. It was here
that Foccart came to play an essential role, that of architect of
the series of Cooperation accords with each new state in the sectors
of finance and economy, culture, education, and the military. There
were initially eleven countries involved: Mauritania, Senegal, Cote
d'Ivoire, Dahomey (now Benin), Upper Volta (now Burkina Faso),
Niger, Chad, Gabon, Central African Republic, Congo-Brazzaville, and
Madagascar. Togo and Cameroon, former UN Trust Territories, were
also co-opted into the club. So, too, later on, were Mall and the
former Belgian territories (Ruanda-Urundi, now Rwanda and Burundi,
and Congo-Kinshasa), some of the ex-Portuguese territories, and
Comoros and Djibouti, which had also been under French rule for many
years but became independent in the 1970s. The whole ensemble was
put under a new Ministry of Cooperation, created in 1961, separate
from the Ministry of Overseas Departments and Territories (known as
the DOM-TOM) that had previously run them all.
The key to all this was the agreement signed between France and its
newly-liberated African colonies which locked these colonies into
the economic and military embrace of France. This Colonial Pact not
only created the institution of the CFA franc, it created a legal
mechanism under which France obtained a special place in the
political and economic life of its colonies.
France in the political, commercial and defence processes in the
African countries. On defence it agreed two types of continuing
contact. The first was the open agreement on military co-operation
or Technical Military Aid (AMT) agreements, which weren't legally
binding, and could be suspended according to the circumstances. They
covered education, training of servicemen and African security
forces. The second type, secret and binding, were defence agreements
supervised and implemented by the French Ministry of Defence, which
served as a legal basis for French interventions. These agreements
allowed France to have pre-deployed troops in Africa; in other
words, French army units present permanently and by rotation in
bases and military facilities in Africa; run entirely by the French
(and, incidentally, paid for by the Africans),.
In summary, the colonial pact maintained the French control over the
economies of the African states; it took possession of their foreign
currency reserves; it controlled the strategic raw materials of the
country; it stationed troops in the country with the right of free
passage; it demanded that all military equipment be acquired from
France; it took over the training of the police and army; it
required that French businesses be allowed to maintain monopoly
enterprises in key areas (water, electricity, ports, transport,
energy, etc.). France not only set limits on the imports of a range
of items from outside the franc zone but also set minimum quantities
of imports from France. These treaties are still in force and
operational.
One of the most important influences in the economic and political
life of African states which were formerly French colonies is the
impact of a common currency; the Communuate Financiere de l'Afrique
("CFA') franc. There are actually two separate CFA francs in
circulation. The first is that of the West African Economic and
Monetary Union (WAEMU) which comprises eight West African countries
(Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger,
Senegal and Togo. The second is that of the Central African Economic
and Monetary Community (CEMAC) which comprises six Central African
countries (Cameroon, Central African Republic, Chad,
Congo-Brazzaville, Equatorial Guinea and Gabon), This division
corresponds to the pre-colonial AOF (Afrique Occidentale Franà §aise)
and the AEF (Afrique Ã"degreesquatoriale Franà §aise), with the exception that
Guinea-Bissau was formerly Portuguese and Equatorial Guinea
Spanish).
Each of these two groups issues its own CFA franc. The WAEMU CFA
franc is issued by the BCEAO (Banque Centrale des Etats de l'Afrique
de l'Ouest) and the CEMAC CFA franc is issued by the BEAC (Banque
des Etats de l'Afrique Centrale). These currencies were originally
both pegged at 100 CFA for each French franc but, after France
joined the European Community's Euro zone at a fixed rate of 6.65957
French francs to one Euro, the CFA rate to the Euro was fixed at CFA
665,957 to each Euro, maintaining the 100 to 1 ratio. It is
important to note that it is the responsibility of the French
Treasury to guarantee the convertibility of the CFA to the Euro.
The monetary policy governing such a diverse aggregation of
countries is uncomplicated for African Central Banks because it is,
in fact, operated by the French Treasury, without reference to the
central fiscal authorities of any of the WAEMU or the CEMAC. Under
the terms of the agreement which set up these banks and the CFA the
Central Bank of each African country is obliged to keep at least 65%
of its foreign exchange reserves in an "operations account" held at
the French Treasury, as well as another 20% to cover financial
liabilities.
The CFA central banks also impose a cap on credit extended to each
member country equivalent to 20% of that country's public revenue in
the preceding year. Even though the BEAC and the BCEAO have an
overdraft facility with the French Treasury, the drawdowns on those
overdraft facilities are subject to the consent of the French
Treasury. The final say is that of the French Treasury which has
invested the foreign reserves of the African countries in its own
name on the Paris Bourse.
In short, more than 80% of the foreign reserves of these African
countries are deposited in the "operations accounts" controlled by
the French Treasury. The two CFA banks are African in name, but have
no monetary policies of their own. The countries themselves do not
know, nor are they told, how much of the pool of foreign reserves
held by the French Treasury belongs to them as a group or
individually. The earnings of the investment of these funds in the
French Treasury pool are supposed to be added to the pool but no
accounting has ever been given to either the banks or the countries
of the details of any such changes. The limited group of high
officials in the French Treasury who have knowledge of the amounts
in the "operations accounts", where these funds are invested;
whether there is a profit on these investments; are prohibited from
disclosing any of this information to the CFA banks or the central
banks of the African states.
This makes it impossible for African members to regulate their own
monetary policies. The most inefficient and wasteful countries are
able to use the foreign reserves of the more prudent countries
without any meaningful intervention by the wealthier and more
successful countries. Most importantly, the French Government uses
these funds on deposit in France as assets of France. The CFA franc
devaluation of 50 per cent against the French franc in January 1994
was a great surprise to several of the African states and caused
major problems for them.
The problems for the African states are growing. The coming crisis
in the Euro, with the bailouts of Greece, Portugal and others will
have a strong effect on the value of the Euro. With the CFA franc
pegged to the Euro the value of the CFA will decline with it. The
cost of commodities (petroleum products, foodstuffs, etc.) priced in
dollars will grow to be a heavier burden on the African economies.
Moreover, France itself is in deep financial trouble.
The International Monetary Fund has warned this week that France
will have to carry out more spending cuts to ensure it reaches its
deficit reduction commitments amid lower-than-expected growth
expectations. While France has predicted 2.25 per cent growth for
2012, the IMF has downgraded this to 1.9 per cent next year.
The French are spending almost US$2 million a day bombing Libya;
above the budgeted expenditure in its defence budget. France is very
short of money. However, the cost of massacring Ivoirians, using
tanks, helicopter gunships and Special Forces were offset against
the Ivory Coast money it was holding so didn't add to the budgetary
problems. The killing of Africans in the Ivory Coast, Cameroons,
Rwanda, Chad and the Central African Republic have never been the
subject of a budget request to the French defence budget as the
Office of the President deducts these from the tranche at the
Treasury (which is why it has never been debated in the French
National Assembly). To add insult to injury the French estimated
that the French business community had lost several millions of
dollars when, in the rush to leave Abidjan in 2006 when the French
Army massacred 65 unarmed civilians and wounded 1,200 others, the
French lost money as they feared the revenge of the Ivoirians, The
French demanded that the Ouattara government which they had
installed paid them compensation for these putative losses. Indeed
the Ouattara government paid them twice what they said they had lost
in leaving.
Surely the time has come for the francophone governments to ask the
French for a proper accounting of the money they are holding.
Perhaps the next government in the Ivory Coast which will succeed
Ouattara's assassination or defeat at the polls will ask the French
for an accounting. Wade in Senegal has asked but was never answered.
The solution seems simple. Until the French give a proper accounting
for Africa's billions the African states should stop sending more to
them. It is bad enough paying their overseer for the cost of his
whip used to chastise them. It is wholly unreasonable to continue to
do so when there is no upside, only potential losses.
