Introduction – The Last Colonial Currency: A History of the CFA Franc – Part 1

I have been commissioned to write the Introduction (Preface) to the upcoming book – The Last Colonial Currency: A History of the CFA Franc – by Fanny Pigeaud and Ndongo Samba Sylla, which is an English version of the original 2018 book, L’arme invisible de la Françafrique. It will soon be published by Pluto Press (UK) – as soon as I finish this introduction. The book is incredibly important because it shows the role that currency arrangements play in perpetuating colonial oppression and supporting the extractive mechanisms that the wealthy have used for centuries to further their ambitions. It also resonates with more recent neoliberal trends where these extractive mechanisms, formerly between the colonialist (metropolis) and the occupied peripheral or satellite nation, have morphed into intra-national urban-regional divides. I am very appreciative for the chance to write this introduction for these great authors. This is Part 1. Part 2 follows tomorrow. And then you can all rush out and purchase the book.


Metropolitan France has been torn in 2019 by the uprising of the gilets jaunes, who give credence to the prediction made by Christian Guilluy in his 2016 book Le crépuscule de la France d’en haut that there would be a “modern slave rebellion” against low pay, high unemployment, and high taxation, all of which has spawned rising inequality and a depressed material outlook among the regional working class in France who lead struggling lives in “La France périphérique”.

Guilluy’s culprits are the so-called “bourgeois-bohèmes” or “bobos”, the urban elites who have largely benefited from the globalised world and have “supported the economic policies of the upper class for 30 years now”, which reward them with well-paid employment, superior status, rising wealth through housing price inflation, often through the gentrification of traditional working class suburbs, access to a diversity of cultural pursuits and the rest of it.

But while this group have embraced globalism, the working class, who live and struggle outside the “new citadels”, have increasingly been left behind. To accentuate the divide, these global beneficiaries adopt a rather schizoid attitude to the disadvantaged.

The ‘bobos’ on the Left (referred to in the modern hip jargon as ‘the woke’) speak of international solidarity and advance, in David Harvey’s words, “the Kantian dream of cosmopolitan republicanism” (Harvey, 2000).

But then, as if forgetting their bountiful faith in humanity, they accuse those who support Brexit or the breakup of the EU, for example, as being ‘particularists’, who are racist and supportive of xenophobic nationalism, are ignorant of human potential, and have abandoned the moral responsibilities to a greater humanity. This disdain soon morphs into accusations about fascism and all manner of evil.

It is clear that La France périphérique is in rebellion, albeit somewhat disorganised.

But the shift in outlook is undeniable. And it has been exacerbated or engendered by the fact that the traditional political voices of the working class, the Socialist Party in the French context, has largely been seen as being complicit in introducing policies that have worsened the divide.

Guilluy’s thesis translates directly to recent events across the English Channel, where the disdain for Brexit among the urban, educated elites, who otherwise advocate progressive policy interventions by government, compromised the British Labour Party so much that it turned its back on the traditional supporters in the Midlands and the Northern regions and reneged on its promise to support the Leave outcome of the June 2016 Referendum. History now tells us that that decision has had catastrophic consequences for the Party’s electoral prospects into the future.

As British academic Ursula Huws (2019) noted:

… the very creation of the category ‘woke’ sets up the counter-category of the ‘unwoke’. People who do not share the ‘woke’ values are likely to be characterised as racist, sexist, homophobic and transphobic. Not only are they considered stupid and unenlightened; they may even be demonised as proto-fascist ground troops, vulnerable to any siren call from the far right that is directed towards them.

And therein lies the problem. Nobody likes to be labelled stupid or ignorant. Or to see their culture demonised.

I raise these issues here because they illustrate how neoliberalism has evolved over the decades. Our meaning of the term ‘periphery’, as it entered the lexicon via world systems theory, has changed.

The underlying neoliberal ideology that has created these urban-regional divides among people in our advanced nations in recent decades is, in fact, an advanced expression of the earlier extractive mechanisms that the wealthy have used for centuries to further their ambitions through invasion and occupation (colonialism).

In that context, the ‘periphery’ referred to the less developed nations relative to the ‘core’ nations, the latter being where wealth and economic power was concentrated.

One of the curiosities I have encountered in my work as a development economist is: Why are the nations in Africa, for example, so poor, when it is obvious to all and sundry that they possess massive resource wealth and burgeoning populations, that would achieve high levels of education and skill development in advanced nations?

This is the topic of dependency theory, which provides a solid framework for understanding the nature of underdevelopment.

Dependency theory was developed to help us understand the functional relationships that define how the two types of nations interact and how the core extracts productive resources and wealth from the periphery in the name of economic development.

In other words, the ‘core’ is reliant on exploiting the ‘periphery’ for their continued material prosperity and to prevent realisation crises occurring in their domestic markets.

The vehicle of that exploitation also evolved from the brutal slavery regimes to much more sophisticated and less obvious means of maintaining political and economic servitude.

Andre Gunder Frank, who completed his doctorate at the University of Chicago under the supervision of Milton Friedman, became a fierce critic of the free market approach espoused by the Chicago Boys, who were Friedman’s collection of doctoral students most noted for the socio-economic damage they did in Chile after the illegal overthrow of Salvatore Allende in 1973 by General Pinochet.

Gunder Frank’s 1967 book, Capitalism and Underdevelopment in Latin America, built on the late 1940s work by the economists Raúl Prebisch and Hans Singer.

The traditional theory of economic development (modernisation theory) suggested that nations follow a pattern where they begin as undeveloped, primitive societies and through industrialisation (investment, adoption of best-practice technology) and institutional and governance development, begin to operate like developed nations.

A middle class forms and incomes grow.

An export-orientation is then encouraged to plug the nation into the world economy.

The – Prebisch-Singer Thesis – challenged this traditional neo-classical theory (which originated from David Ricardo’s notions of comparative advantage) and conjectured that the terms of trade moved against poorer nations without an industrial base in favour of richer industrial nations.

In other words, the world prices of primary commodities (agriculture etc) declines over time relative to the price of industrial goods, which increases income and wealth inequalities across (and within nations).

The policy implications, pushed by the authors, included recommendations that the development process should begin with the creation of a import-competing manufacturing base.

Dependency theory extends that work and posits that the nations that we now consider to be developed were never ‘undeveloped’ in the way we view nations in, say, Africa.

Rather, the nations that are called undeveloped have a unique role in the world system unlike anything that the rich countries have ever played.

The mainstream view is that Africa is poor and interventions from the advanced nations are required to make it rich. But dependency theory considers Africa to be ‘rich’ and those riches are being continually drained to the benefit of the core wealthy nations.

Dependency theory posits that resource flows are from periphery to the core rather than the other way around. The rich nations do not ‘invest’ in the ‘income poor’ nations to make the latter richer.

Essentially, Gunder Frank argued that the underdeveloped countries were in that state because they were functionally essential to making the developed nations at the core richer.

So what the mainstream considered to be a rather benign supportive role by the colonialist, was rather better seen as the rich nations establishing processes (supported by international institutions such as the IMF and the World Bank) to ensure that resources flow to the benefit of the advanced world.

These processes, which include legal frameworks and tax rules, privatisation, and the imposition of fiscal austerity to suppress public good development, undermine the opportunities of the ‘income poor’ nations to use their own resource riches to their own advantage.

So the sort of policy structures advocated by multilateral institutions such as the IMF and the World Bank were not about developing the undeveloped nations.

Rather, they had the effect of developing the richer nations further and holding the underdeveloped nations in a state where they could act as resource conduits for the richer nations.

Along the way, the underdeveloped nations develop a middle class and a localised upper class but they only serve to drain the resources in favour of the richer nations even more efficiently.

Gunder Frank (1966: 20) said that the underdeveloped nations serve “as an instrument to suck capital or economic surplus out of … [the] … satellites and to channel … this surplus to the world metropolis”.

He also eschewed the use of export-oriented development – favoured by the World Bank and the IMF – believing that it destroyed the local subsistence systems and accelerated the transfer of surpluses to the core while leaving the peripheral economies heavily indebted and in precarious states.

A May 2017 Report from Global Justice Now – Honest Accounts 2017 – affirmed this view:

Africa is rich – in potential mineral wealth, skilled workers, booming new businesses and biodiversity. Its people should thrive, its economies prosper. Yet many people living in Africa’s 47 countries remain trapped in poverty, while much of the continent’s wealth is being extracted by those outside it.

There are many well-known methods of surplus extraction that have been used to maintain this situation.

And, currency arrangements are a crucial part of this story.

Modern Monetary Theory (MMT) shows that a currency is intrinsically related to the way the government is able to shift productive resources from the non-government sector to the public sector in order to fulfill its socio-economic mandate.

In the context of colonial, and then neocolonial relations, currency arrangements also serve to facilitate the transfer of wealth from peripheral nations (the colonies) to the metropolis (the colonial power).

In the case of French Africa, these arrangements have continued, even after independence was granted to the colonies by Charles de Gaulle in 1960.

Which is why this book – The Last Colonial Currency: A History of the CFA Franc – by Fanny Pigeaud and Ndongo Samba Sylla, an English-language version of the original 2018 book, L’arme invisible de la Françafrique, is so important and should become essential reading for all.

The excellent decision by Pluto Press to commission and English translation for this book will extend its readership considerably and hopefully influence the progressive debate.

The authors’ exposition of how currency arrangements in fourteen African countries, organised as two separate but linked monetary zones, introduced by the French in 1945 in (mostly) their former colonies, have maintained the colonial wealth extraction systems, even though these nations achieved independence in 1960.

They show that the CFA franc maintains a “diabolical” system of exploitation that, despite the popular narratives, which construct France as some sort of benevolent protective force in Africa, helping the colonies advance towards prosperity, has, instead, served to guarantee “France’s economic control of the colonies” and facilitate “their wealth’s drainage towards the then economically fragile metropole.”

The CFA franc is a construction of the French Treasury, despite the ‘Africanisation’ of the actual monetary instruments. The French Treasury “has the power to determine the external value of the CFA franc” and “all the foreign exchange transactions (the purchase or sale of CFA francs) of the fifteen countries of the franc zone have to go through the French Treasury.”

As the authors show, the CFA franc:

… is the most powerful weapon of the ‘Françafrique’, this peculiar neocolonial system of domination that the French state established on the eve of the independence of the former colonies, with the precise aim of preserving the advantages of the colonial pact.

So how did that all come about?


I will finish this work in Part 2 where I discuss a little more of the history, current trends, and the role of the European Union in maintaining this austerity-biased oppression.

That is enough for today!

(c) Copyright 2020 BIll Mitchell. All Rights Reserved.

This Post Has 18 Comments

  1. Brilliant article.

    It’s baffling the African currencies still accept the CFA. The rationale was always to fight inflation, although at some point the CFA was devalued by 50%, so why keep that argument then?
    I hope African nations will use their own currencies sooner than later, but allegedly i remember reading even East-African countries like Kenia were considering creating a monetary union. Beggars belief really. I hope MMT will enlighten them.

  2. How 15 African countries would agree to the explotative nature of the CFA is beyond belief, but it is a clear and perfect example of the nature of the bobos is to serve their own selfish interests while pleasing their masters in the metropoles and making the sure the masses are keep in check through grinding poverty. But will give, it definitely.
    Willem, I am from Kenya and find it unbelievable that the East Africa Community, an umbrella body composed of six nations, is pushing ahead with what they call a monetary union. The ‘shining’ example that’s always being cited is the success of the Euro. Sigh.

  3. Looking forward to part two. For now I would observe that local oligarchs are always complicit with the core in the exploitation and looting of their fellow countrymen in the periphery, a process further enhanced by capital mobility (ie. a lack of capital controls) and the world network of tax havens.

    I wonder also to what extent this core/periphery exploitation dynamic is also at play within countries — thinking here for instance of “fly over” country in the US between the urban coastal elites (or the rural/urban divide more generally)

  4. Franc CFP (Colonnies Francaises du Pacific) in New Caledonia still current. Very rich region in minerals (Nickel and many more precious resources).

  5. I am pleased to see that you support Dr. Sylla’s work. I met him in the last MMT conference and found him to be a very nice person and also very knowledgeable.

    I am sick and tired of the dreadful scenes of migrating Africans drowning in the Mediterranean and wounded by razor wire borders in our south while Europeans lecture Africans on how to develop their nations when in fact they are keeping them in permanent underdevelopement thanks to the CFA franc and other instruments of domination.

    It is not to difficult to relate the CFA franc experience with that of the European peripherals under the EU and Euro who are gradually and relentlessly being de industrialized to the benefit of Germany and other core countries. We have truly become PIGS that they can farm.

  6. Some additional reading suggestions:

    This is a fairly good mainstream-financial-press-article:

    Two months back I provided chapter-by-chapter English-language summaries of the French original on the modern-monetary-theory google group. Start here:!topic/modern-monetary-theory/VO0VCy11EWY

    Thank you very much.
    Jim Keenan

  7. ‘Guilluy’s thesis translates directly to recent events across the English Channel, where the disdain for Brexit among the urban, educated elites, who otherwise advocate progressive policy interventions by government, compromised the British Labour Party so much that it turned its back on the traditional supporters in the Midlands and the Northern regions’

    But we have to ask the question: ‘why has there been so little response from the periphery in the UK compared to France?’

    There were many fault lines affecting the Labour Party. There was the Leave/Remain fault line bu then there was also the four year war on Labour from the press using epithets such as ‘unpatriotic’, ‘antisemitic’, ‘bankrupting the country’, terrorist sympathiser’. The Leave side had an infantile, magical belief that Leaving alone would suddenly change things without thinking of any fiscal stance to go with it-it was disgustingly childish, uninformed and manipulated by the Tories. The Remain camp was equally uninformed and coffee-table cosmopolitan.

    Nowhere was there any educative influences or really substantive debates.

    The situation in France, Chile, Lebanon and Colombia seem to possess a quality of understanding that is completely missing in the UK which seems to wallow in a state approaching sleeping sickness. Here in the UK we are already discussing how there is no class consciousness, no understanding of the rentier economics that grips this country, no real working class anymore.

    Instead we have an atomised, fragmented group where peoples are running around in a gig economy working ina platform culture and now seeing themselves as individual survival machines surfing the madness of it all fuelled by intravenous Red Bull and nervous energy.

    The so-called ‘workers’ are now individualised units of consumption nursing mortgages with religious devotion and looking down on welfare claimants an homeless as ‘losers’,

    After the election, Johnsons buggered off to Mustique to stay at a billionaire’s mansion (after saying we need to honour those that voted for us in the North with unstinting hard work!) while Corbyn worked at a homeless centre in Islington and was seen as a jerk/loser for doing so.

    This is where we are in the Uk.

  8. Patrick B-thanks for that link.

    Looks like the Franc CFA in West Africa is about to give way to a new currency convergence whose Primary criteria are:

    The four primary criteria to be achieved by each member country are:[2]

    A single-digit inflation rate at the end of each year
    A fiscal deficit of no more than 4% of the GDP
    A central bank deficit-financing of no more than 10% of the previous year’s tax revenues
    Gross external reserves that can give import cover for a minimum of three months.
    The six secondary criteria to be achieved by each member country are:[3]

    Sounds horrible familiar and another circular firing squad set up where everyone is supposed to aim for budget surpluses regardless of the state of the real economy.

  9. Simon Cohen, my pleasure. I meant to add that the Wiki Evaluation seemed to feed perfectly into Prof. Mitchell’s analysis: ‘economic planning is all but impossible and the evidenced benefits remain ‘remarkably’ low, but the pro fixed currency establishment say it’s good because it facilitates exports and imports and offers macroeconomic stability (to maximise wealth extraction). I may have added the bit in brackets!

  10. Simon Cohen wrote:-
    “….Johnsons buggered off to Mustique to stay at a billionaire’s mansion (after saying we need to honour those that voted for us in the North with unstinting hard work!) while Corbyn worked at a homeless centre in Islington…”

    Chacun à son gout.

    Seems to me they’d both earned a good break, Who are we to sit in judgment on other people’s choice of recreation? (May one hope you didn’t mean to imply that Corbyn’s choice was a penance)?

    (BTW Isn’t excess of bile regarded as being unhealthy for the sufferer?)

  11. Superb Bill,

    I couldn’t get Scotland out of my mind while I was reading that. Trying to break free from London eager to be trapped by Brussels.

    And Michael Hudson’ s quote ringing in my ears from every paragraph.

    ” The idea that the euro has “failed” is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do. … Removing a government’s control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession. “It puts monetary policy out of the reach of politicians. Without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business. Hence, currency union is class war by other means. “

  12. @simon cohen,

    if you dont have an internationally tradable currency, then i suppose you would need some sort of financial rules based system for any new currency union .

    but unlike the euro it would have to sustainable and flexible .

    i dont think mmt has really looked at how do you get countries with a lot of labour resources and a narrow export base, who have supply side constraints , into a globally tradable currency system, without the need to accumilate foreign currency reserves.

    how would mmt re design the global payments system to bring the periphery onto a level playing field

  13. @robertH said:
    “Seems to me they’d both earned a good break; who are we to sit in judgment on other people’s choice of recreation? ”

    Yes…but the choice no doubt (or only possibly?) indicates who has the *real* concern for the disadvantaged among his fellow countrymen…..

  14. @ Neil Halliday
    “…but the choice no doubt (or only possibly?) indicates who has the *real* concern for the disadvantaged among his fellow countrymen…..”

    I don’t think it tells us anything about that – either way.

    Granted you said “only possibly?”. But without that qualified qualifier wouldn’t the proposition be a fallacy of composition? ie fallacious by definition?

    I think we dwell too much these days on politicians’ personal lives and idiosyncracies, and go in far too much for back-biting and spite. Neither the Left nor the Right wins any kudos in that regard. Corbyn has certainly been subjected to far more than his fair share. As for Bojo, it’s too early to judge: IMO nothing before 19/12/2019 has any real bearing.

  15. Robert H,

    You managed to miss the point I was trying to make which was about the PUBLIC’s perception of those two choices as part of a cultural observation of the state of the UK.

    Your ‘chacun a son gout’ liberalism’ seems to imply a Zen-like observational approach implying a state of ‘choiceless awareness’. The idea that a politicians back story is of no relevance and they become a ‘tabula-rasa’ on election is also interesting. Not sure how those Factory Acts of the 19th Century would have come about with a ‘chacun a son gout’ nonchalance or any of the succeeding social reforms or any critique of human behaviour in relation to the climate crisis because flying to Mustique is a case of pure personal preference about which we must not comment or have a view lest we be adjudged ‘bilious.’

    Should we thus critique nothing and that Johnson’s back-story of lies, threats of violence, transparent opportunism, antisemitism and racism in his writings are totally of no value in any from of assessment.

    So Scott Morrison is merely exhibiting his personal ‘gout’ as the wild-fires burn?

  16. “You managed to miss the point I was trying to make…”
    – No I didn’t. I made the – flippant – rejoinder I thought its censoriousness merited. Which was uncalled-for I grant you and I apologise.

    “Should we thus critique nothing…”
    – Of course not, if it’s relevant.

    “… and that Johnson’s back-story of lies, threats of violence, transparent opportunism, antisemitism and racism in his writings are totally of no value in any from of assessment.”
    – Setting aside for the sake of argument whether there’s any substance in your list of charges, I don’t see how they can be said to be relevant anyway to assessing his performance as Prime Minister of the newly-elected government unless and until circumstances happened to arise to give them relevance to that (provided of course that they could then be substantiated).

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