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The CFA Franc Zone

Economic Development and the Post-Covid Recovery

  • Book
  • © 2021

Overview

Authors:
  1. Ali Zafar

    1. Falls Church, USA

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  • Contains case studies and real life examples to highlight the challenges and opportunities within the CFA franc zone

  • Links the CFA franc zone to broader discussions on African development and employment

  • Utilizes graphs and diagrams to illustrate key trends and developments seen within the CFA franc zone

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Table of contents (38 chapters)

  1. Front Matter

    Pages i-xxiii
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  2. Anatomy of the CFA Zone

    1. Front Matter

      Pages 1-1
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    2. The Context

      • Ali Zafar
      Pages 3-11

    3. The Institutional Arrangements That Govern the Zone

      • Ali Zafar
      Pages 13-21

    4. History of the CFA Zone

      • Ali Zafar
      Pages 23-34

    5. The Macron and Ouattara Reform of the CFA

      • Ali Zafar
      Pages 35-40

    6. The Problem with the CFA Zone

      • Ali Zafar
      Pages 41-45

    7. Reforming and Modernizing the Zone with Currency Flexibility

      • Ali Zafar
      Pages 47-48

    8. The Roadmap for a Better Future

      • Ali Zafar
      Pages 49-52

  3. CFA Zone Development Puzzles

    1. Front Matter

      Pages 53-53
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    2. Poverty Traps in the Sahel

      • Ali Zafar
      Pages 55-60

    3. Governance Challenges in the CFA Zone

      • Ali Zafar
      Pages 61-70

    4. The Underperforming Private Sector

      • Ali Zafar
      Pages 71-76

    5. Lack of Dynamic Agriculture and the Limited Structural Transformation

      • Ali Zafar
      Pages 77-82

    6. Climate Change and Migration

      • Ali Zafar
      Pages 83-88
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Keywords

About this book

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.

Reviews

Veterans of Africa's development usually say that the countries in the CFA zone face the same challenges as the rest of the continent. It is just that they face them all at once, have little analysis of the causes, and cannot talk about their currency arrangement. That is about right. This book is a pioneer attempt at filling the knowledge gap that has, for far too long, prevented governments--and the army of donors, financiers, and academics who support them--from articulating an agenda that unleashes the economic potential of a region the world has left behind. From poverty to migration, from governance to extractives, and from business climate to climate change, it is all here. And to the delight of macroeconomists, Zafar looks at the CFA regime right in the eye: is it a vestige of colonial times or is it still the right exchange rate policy when institutions are weak and trade shocks are frequent? His answers are path-breaking and kick off a debate that is as fascinating as it is overdue.

Marcelo Giugale, Professor at Georgetown University and former Director of the World Bank's Department of Financial Advisory and Banking Services 

When monetary unions were first established in Africa, there were reasons to believe that they might reduce transaction costs by integrating economies of member countries and promoting market efficiency, both of which should have led to better economic performance in the member countries. This book shows us how CFA Franc zones have failed to promote strong economic growth. It presents the glaring problems of institutional design in two CFA Franc Zones in Francophone Africa. It exposes how political interests, both in Africa and France, trumped the functioning of monetary and fiscal institutions.  

Serdar Yilmaz, Lead Public Sector Specialist, World Bank

Exchange rate management is among the most important policy instruments for use by a country in its quest for rapid economic growth and external balance.  Yet for over 75 years, the 14 countries of the CFA zone in Africa did not have this choice, having kept the same exchange rate and monetary arrangements with their colonial power, France.  Very few studies have been pursued on this issue; it is as if the world has largely passed by these countries.  Zafar fills this important knowledge gap by carefully dissecting the CFA zone, reviewing its history and analyzing the effects of the fixed exchange rate regime on these economies.  He makes a substantive contribution to the current policy debate by evaluating the development outcome of this currency arrangement from different economic and political perspectives. This is a fascinating and must-read book for policy makers and anyone interested in Africa development.

Hinh T. Dinh, Senior Fellow, Policy Center for the New South, Rabat, Morocco and Senior Research Fellow, Indiana University, Bloomington, Indiana, USA.  

 

Authors and Affiliations

  • Falls Church, USA

    Ali Zafar

About the author

Ali Zafar 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.

Bibliographic Information

  • Book Title: The CFA Franc Zone

  • Book Subtitle: Economic Development and the Post-Covid Recovery

  • Authors: Ali Zafar

  • DOI: https://doi.org/10.1007/978-3-030-71006-4

  • Publisher: Palgrave Macmillan Cham

  • eBook Packages: Economics and Finance, Economics and Finance (R0)

  • Copyright Information: The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021

  • Hardcover ISBN: 978-3-030-71005-7Published: 11 May 2021

  • Softcover ISBN: 978-3-030-71008-8Published: 12 May 2022

  • eBook ISBN: 978-3-030-71006-4Published: 11 May 2021

  • Edition Number: 1

  • Number of Pages: XXIII, 247

  • Number of Illustrations: 2 b/w illustrations, 25 illustrations in colour

  • Topics: African Economics, Development Economics, Political Economy/Economic Systems

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