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France Benefits at the expense of the African Franc Zone

Brian Sturgess - July 2013

Speed Read
  • The member countries of the African Financial Community, a currency union with a fixed exchange rate pegged to the euro, grew at a slower rate than the rest of sub-Saharan Africa over the period 2000-12.
  • The combination of an overvalued convertible currency, corruption, macroeconomic uncertainty and the free movement of resources across most of Francophone Africa encourages serious capital flight.
  • A recent estimate places aggregate net capital flight out of the African currency union during the period 1970 to 2010 at around US$83.5 billion,117% of combined GDP.
  • Capital flight of this order will have seriously reduced domestic investment and depressed economic growth.

A Split Continent

Living standards among the fifteen [1] African countries in the mainly francophone [2] CFA (Communauté Financière Africai...

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