The socio-economic impacts of membership in a common currency union: Sub-Saharan Africa and the CFA Franc. The case of Cameroon.

摘要

The existence of a common currency union in French-speaking Sub-Saharan Africa was supposed to have served as the foundation for economic integration within the union. But due to the nature of the protocol that defined Franco-African relations vis-a-vis monetary cooperation, the union, in spite of its longevity, has failed to foster economic integration. Rather, the built in mechanisms that were to serve as the administrative guidelines for this cooperation have helped create a culture of dependency within the African Sub-region.; This study looks at monetary policy deliberations within a common currency union such as exist in the CFA Franc Zone, with suggested alternative(s) for future monetary policy initiatives. With the advent of a common currency for Europe, the dynamics of Franco-African monetary cooperation are bound to change. When a country joins a monetary union, it surrenders its right to unilateral monetary policy decision making. Members of the CFA Franc Zone relinquished part of this power to the French Treasury. As France has opted to join the European Monetary Union, the French Treasury will also relinquish its powers to unilateral monetary policy decision making.; In effect, the dawn of a new monetary policy approach has arrived within the CFA Franc Zone. A concluding note to this study is for the Zone to discontinue relations with the French Treasury, and streamline itself along the lines of a Currency Board Arrangement (CBA). These changes, albeit defacto in nature, are necessary not only for the survival of the zone, but for better economic management. The Zone's attempt to continue with the fixed-peg alignment to the Euro, as was the case with the French Franc has been criticized as being uneconomical. It now remains to be seen whether the CFA Franc Zone is ready to stand on its own and fulfill its economic mission as envisioned.