This book provides an empirical analysis of economic and political structures impacting the CFA franc zone. Concise and practical chapters explore the history of the CFA franc zone, challenges to development, geopolitical issues, the importance of flexible exchanges rates, growth trends, and the impact of the Covid crisis. Policy reform is examined to detail economic approaches that could reduce poverty and increase the quality of life within the area.
This book aims to present a macroeconomic and exchange rate framework to promote development and post-Covid recovery within the CFA franc zone. It will be of interest to students, researchers, and policymakers involved in African economics, the political economy, and development economics.
is a macroeconomist and private sector specialist with more than 20 years of experience researching policy and advising governments in sub-Saharan Africa, South Asia, and the Middle East. Over the course of his career he has served as a Senior Economist with the International Finance Corporation and World Bank, as well as a consultant to the United Nations, Gates Foundation, and USAID.
1. The Context.- 2. The Institutional Arrangements that Govern the Zone.- 3. History of the CFA Zone.- 4. The Macron and Ouattara Reform of the CFA.- 5. The Problem with the CFA Zone.- 6. Reforming and Modernizing the Zone with Currency Flexibility.- 7. The Roadmap for a Better Future.- 8. Poverty Traps in the Sahel.- 9. Dutch Disease and Resource Curse in CEMAC.- 10. The Underperforming Private Sector.- 11. Stagnant Agriculture and the Lack of Structural Transformation.- 12. Climate Change and Migration.- 13. The Tragedy of Lower Quality Economic Analysis for Poorer Countries.- 14. Geopolitics, France, and African Elites: The Political Economy.- 15. The Triumph of Politics over Economics.- 16. How Britain was Different: The Story of the Sterling Zone.- 17. Exits from the CFA style arrangements: Experience of Mauritania Morocco, and Vietnam.- 18. Colonialism, Racism, and Black Lives.- 19. The Winds of Change.- 20. Less Competitive Economies.- 21. Political Economy of Urban Bias against Rural Poor.- 22. Coping with Shocks: Erratic Public Investment in CFA Zone.- 23. Lack of Independent Monetary Policy and Financial Intermediation Challenges.- 24. Importance of Flexible Exchange Rate to Deal with Covid Shocks.- 25. Impact of the Covid-19 Pandemic on the CFA Zone.- 26. What is Happening to Growth and Inflation.- 27. Widening Twin Deficits in the Subzones.- 28. Accelerating Debt.- 29. Recent Misalignment.- 30. Getting out of the Impasse: Exchange Rate Options for the CFA Zone.- 31. Alternative Pegs for the CFA: Basket, Separate Pegs for UEMOA and CEMAC, Peg to Dollar.- 32. Possible Floating Arrangements for the CFA: Managed and Free Floating.- 33. Goodbye CFA: Ten Steps Exchange Rate Reform Roadmap for a post-Covid World.- 34. How to Address Growing CFA Zone Debt.- 35. Strengthen Supply Chains, Reduce Transport Costs, and Accelerate Regional Integration.- 36. Time to Support SME Development in the CFA Zone.