No respite for France as a ‘New Africa’ rises

 

 

By Pepe Escobar (Reprinted in part from a larger article found here)

 

You have the right to no monetary policy 

 

The Communauté Financière Africaine (African Financial Community, CFA) racket makes the Mafia look like street punks. It means essentially that the monetary policy of several sovereign African nations is controlled by the French Treasury in Paris.

The Central Bank of each African nation was initially required to keep at least 65 percent of their annual foreign exchange reserves in an “operation account” held at the French Treasury, plus another 20 percent to cover financial “liabilities.”

Even after some mild “reforms” were enacted since September 2005, these nations were still required to transfer 50 percent of their foreign exchange to Paris, plus 20 percent V.A.T.

And it gets worse. The CFA Central Banks impose a cap on credit to each member country. The French Treasury invests these African foreign reserves in its own name on the Paris bourse and pulls in massive profits on Africa’s dime.

The hard fact is that more than 80 percent of foreign reserves of African nations have been in “operation accounts” controlled by the French Treasury since 1961. In a nutshell, none of these states has sovereignty over their monetary policy.

But the theft doesn’t stop there: the French Treasury uses African reserves as if they were French capital, as collateral in pledging assets to French payments to the EU and the ECB.

Across the “FranceAfrique” spectrum, France still, today, controls the currency, foreign reserves, the comprador elites, and trade business.

The examples are rife: French conglomerate Bolloré’s control of port and marine transport throughout West Africa; Bouygues/Vinci dominate construction and public works, water, and electricity distribution; Total has huge stakes in oil and gas. And then there’s France Telecom and big banking – Societe Generale, Credit Lyonnais, BNP-Paribas, AXA (insurance), and so forth.

France de facto controls the overwhelming majority of infrastructure in Francophone Africa. It is a virtual monopoly.

“FranceAfrique” is all about hardcore neocolonialism. Policies are issued by the President of the Republic of France and his “African cell.” They have nothing to do with parliament, or any democratic process, since the times of Charles De Gaulle.

The “African cell” is a sort of General Command. They use the French military apparatus to install “friendly” comprador leaders and get rid of those that threaten the system. There’s no diplomacy involved. Currently, the cell reports exclusively to Le Petit Roi, Emmanuel Macron.

France has for decades made sure there’s very little intra-Africa trade. Landlocked nations badly need neighbors for transit. They mostly produce raw materials for export. There are virtually no decent storage facilities, feeble energy supply, and terrible intra-African transportation infrastructure: that’s what Chinese Belt and Road Initiative (BRI) projects are bent on addressing in Africa.

In March 2018, 44 heads of state came up with the African Continental Free Trade Area (ACFTA) – the largest in the world in terms of population (1.3 billion people) and geography. In January 2022, they established the Pan-African Payment and Settlement System (PAPSS) – focused on payments for companies in Africa in local currencies.

So inevitably, they will be going for a common currency further on down the road. Guess what’s in their way: the Paris-imposed CFA.

A few cosmetic measures still guarantee direct control by the French Treasury on any possible new African currency set up, preference for French companies in bidding processes, monopolies, and the stationing of French troops. The coup in Niger represents a sort of “we’re not gonna take it anymore.”

All of the above illustrates what the indispensable economist Michael Hudson has been detailing in all his works: the power of the extractivist model. Hudson has shown how the bottom line is control of the world’s resources; that’s what defines a global power, and in the case of France, a global mid-ranking power.

France has shown how easy it is to control resources via control of monetary policy and setting up monopolies in these resource-rich nations to extract and export, using virtual slave labor with zero environmental or health regulations.

It’s also essential for exploitative neocolonialism to keep those resource-rich nations from using their own resources to grow their own economies. But now the African dominoes are finally saying, “The game is over.” Is true decolonization finally on the horizon?