Leaving Africa’s Colonial-Era Currency Will Be Hard, But May Be Wise
Burkina Faso, Mali, and Niger are contemplating an exit from the CFA franc zone, which has its roots in French colonialism. Despite the challenges involved, the authorities in these countries could make a new currency arrangement work, as long as they are committed to fiscal rigor.
LONDON – Exiting a longstanding currency union – as Burkina Faso, Mali, and Niger propose to do by leaving the CFA franc zone, comprised of West African states that use the French-backed currency pegged to the euro – is not a decision to be taken lightly. For the departing members, in particular, alternative monetary arrangements could prove elusive and better solutions may be overlooked.