Amid Franco-Italian tensions caused by Rome's recent refusal to take in Ocean Viking migrants, old comments by Georgia Meloni accusing France of colonialism are resurfacing.
As a guest on Non è arena, one of Italy's leading talk shows broadcast on channel LA7, on January 20, 2019, the current Italian prime minister who was then a member of parliament and president of the Fratelli d'Italia party, accused France of using the CFA franc to unduly exploit the resources of the 14 West and Central African countries that use it.
Ms. Meloni's attack was not isolated: several executives of the Five Star Movement (FSM) party made similar remarks on the same day. From Alessandro Di Battista, who tore up a fake 10,000 CFA franc bill on the set of Che Tempo Che Fa, to Luigi Di Maio, the then-president of the Five Star Movement and vice president of the council, who accused France of impoverishing countries that use the currency. The Italian far-right had that day chosen to make the CFA franc a central argument for attacking Paris, the day after 117 migrants disappeared in the Mediterranean, even if it meant caricaturing legitimate economic criticism of the currency or inventing facts.
The CFA franc, a colonial currency?
What Giorgia Meloni said:
"The CFA franc is the colonial currency that France prints for 14 African nations."
It's rather contested
The CFA franc (FCFA) is the name of two currencies used by 14 African countries:
- The WAEMU (West African Economic and Monetary Union), which includes eight West African countries: Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo.
- The CAEMC (Central African Economic and Monetary Community), which includes six Central African countries: Cameroon, Central African Republic, Congo, Gabon, Equatorial Guinea and Chad.
Created and officially used since 1945, the CFA franc was initially a "colonial" currency issued by the Bank of France in a number of countries on the African continent (CFA stood for "French colonies in Africa" in French at the time). Since then, the CFA franc is no longer issued by France but by the two central banks that govern the monetary policy of these two zones (WAEMU and CAEMC). These central banks are the only ones to decide on the amounts to be issued and on the number of bills put into circulation. From a legal point of view, the member countries of these two monetary zones have the option of abandoning the CFA franc to have their own currency.
The two central banks are not entirely free in their monetary policy, as the value of the CFA franc is pegged to the euro
What makes a number of critics say that the CFA franc is the "last colonial currency in the world" is that these two central banks are not entirely free in their monetary policy because the value of the CFA franc is pegged to the euro – which forces the two institutions to follow the European Central Bank's policy, which requires that the value of inflation be limited to less than 2% for the WAEMU and less than 3% for the CAEMC and blocks the printing press.
The fact that France has long been represented in the very governing bodies of the central banks of these two "franc zones" is also, according to critics of the CFA franc, a lever at Paris' disposal to influence these countries' monetary policy. Nowadays, French representation is clearly less influential in these bodies since the December 2019 "reform" of the currency, which was written into French law in the spring of 2020 and which formalized the withdrawal of French representatives from the Central Bank of West African States. Meanwhile, the two French representatives still present at the Bank of Central African States no longer have veto power. This withdrawal, however, had not yet been enacted when Ms. Meloni spoke, in 2019.
A final aspect addressed by Ms. Meloni was that the currency is printed in France, which is true. Two production sites located in southwestern and central France are in charge of manufacturing the money supply, which is then later transferred to Africa. This is actually a rather classic contractual relationship, which many other countries also practice when it costs more to produce their own currency. By 2022, more than 40 of the 54 African countries printed their currencies abroad, as did some European countries, such as Denmark.
The lie about the 'seigniorage' of France
What Giorgia Meloni said:
"France applies a seigniorage that allows it to exploit these nations' resources."
Why it's not true
The argument is crucial to the Italian far right's rhetoric as it allows Rome to imply that Paris has direct responsibility for the large flows of migrants trying to reach Europe by crossing the Mediterranean. But it is not true.
Ms. Meloni is drawing on a reality: The two central banks of the zones where the CFA franc circulates were, until 2020, to deposit 50% of their foreign exchange reserves in an operating account at the Bank of France, in Paris, in keeping with the two monetary cooperation treaties signed with France. However, Ms. Meloni distorted this fact to the extreme by implying that this amounts to 50% of the wealth produced in these 14 African countries returning to France, as she asserted using the example of Burkina Faso:
"France prints its colonial currency for Burkina Faso, which has gold. In exchange, they demand that 50% of what Burkina Faso exports end up in the coffers of the French treasury."
Here, Ms. Meloni is reusing an old argument from some of Paris's critics, who in the past have spoken of France's "colonial tax" in Africa. However, this has little to do with tax and does not amount to extorting half of the wealth of the African countries that use the CFA franc.
The monetary cooperation agreements signed in 1972 and 1973 with these two franc zones formalized certain operating rules that have been in force since the late 1950s, namely:
- unlimited convertibility of the CFA franc into other currencies guaranteed by France
- fixed parity rate between the CFA franc and the French franc (then the euro)
- free movement of capital between the countries of these zones as well as with France
- deposit of at least 50% of foreign exchange reserves of the central banks concerned in Paris
This deposit was supposed to guarantee monetary stability for countries using the CSA franc in order to inspire confidence from foreign investors. Contrary to what Ms. Meloni claimed, France did not use these funds, which remain the property of these 14 African countries. Until recently, this "operating account" opened in Paris was also remunerated by the Bank of France at a higher rate than those of the market rate (0.7%) and brought in several tens of millions to the two central banks concerned annually.
Only a minority of African migrants come from franc-zone countries
What Giorgia Meloni said:
"So the solution is not to take Africans and bring them to Europe, the solution is to free Africa from some Europeans who exploit them and allow these people to live with what they have!"
Why it's not true
Here, Ms. Meloni used the pre-existing criticisms of the CFA franc to conclude that the impoverishment for which it is responsible would push many Africans to cross the Mediterranean to migrate to Europe.
Yet the vast majority of people attempting to reach Europe from Africa are not from countries that use the CFA franc. "It cannot be said that African countries in the franc zone are overrepresented in migratory flows to Europe, even if we consider things over time," said Jacques Barou, director of research at the CNRS (French National Centre for Scientific Research) and migration specialist in 2019. The main flows coming from Africa "are mainly from Sudan, Eritrea and Nigeria, three countries that have never been in the franc zone," he added at the time.
According to data from the International Organization for Migration (IOM) published in July 2019, a few months after Ms. Meloni's claims, most of the African migrants who arrived on European shores in 2017 and 2018 were actually from the Democratic Republic of Congo, Algeria and Somalia, which do not use the CFA franc. Many migrants also came from Cameroon, where the CFA franc circulates, but regular attacks on civilian populations by the terrorist group Boko Haram in the north of the country, flooding and tensions between communities caused by reduced access to water and grazing land are the main reasons for emigration by Cameroonians.
Data compiled since 2014 by the IOM on the origin of migrants who died trying to reach Europe show a similar, if slightly different, pattern. The Maghreb countries (Morocco, Algeria and Tunisia) came out on top, followed by Senegal, Eritrea, Mali and Sudan. In total, of the 3,424 dead that could be identified as nationals of African countries, 80% were from countries that did not use the CFA franc, and 20% from member countries of the franc zones (Senegal, Mali, Côte d'Ivoire and Cameroon). Also of note is that the origin of the majority (83%) of the 29,000 migrants who have died trying to reach Europe since 2014, unfortunately, could not be identified.
Poverty obviously plays a role in the emigration of people from these countries, but political and social violence are also determining factors in the decision to leave a country, especially from the Sahel, where "violence has increased in recent years as a result of a combination of factors," writes the IOM in its latest report, published in 2022.
Economically, the debate over the CFA franc's link to the impoverishment of African countries is almost as old as the independence of these countries from their colonial rule. The currency is regularly criticized by economists because of its link to a strong currency, the euro, which strongly penalizes exports, and therefore these countries' poorest populations.
While it is now relatively well documented that the CFA franc is partly unsuited to these countries' economies, it seems an exaggeration to conclude that the currency impoverishes them, especially to the point of causing massive emigration.