According to France the devaluation of the CFA not valid

While mid-December, the question of a possible devaluation of the CFA was on everyone's lips almost economists and financial Africa, France's ambassador to Senegal, Nicolas Normand, said Sunday that such measures were not relevant.

Speaking on the issue of the Grand Jury Radio Future Media (RFM, private), the diplomat defended his remarks by recalling that the last devaluation of the CFA franc in 1994 was preceded by two years, through debates, France "on the economic interest or not to this devaluation.''

The ambassador also wished to recall that "such a decision is taken by all heads of state gathered in the franc zone." Further adding that if any economist did not recommend a devaluation, so this is it "of no economic benefit.''

According to Nicolas Normand,''the debate does not arise in France. No one recommends that there is no reason to do so.''

Some economists are quick to talk about real "social drama" caused by the devaluation decided in 1994 by the French authorities, largely influenced by the IMF (International Monetary Fund) and World Bank.

The Bretton Woods institutions had then justified their position by arguing that the CFA franc, pegged to the French franc was overvalued, making it - according to them - the African countries with that currency less competitive for export.

But some say the devaluation of the CFA franc was ultimately reduced the purchasing power of consumers, as originally planned without restoring external competitiveness of the economies concerned and the recovery of their trade balances.

The Senegalese economist Sanou Mbaye meanwhile recently estimated during an interview with RFI that the countries of the CFA should do away with the specter of devaluation peg their currency to a''basket of foreign currencies' 'while thinking about the importance of trade with emerging countries such as South Africa and China.

According to the old frame to the African Development Bank, and Senegalese economist, the "CFA does not benefit African economies or the local people." He believes that "France, which benefits from the CFA." Well as observing "every time she is in trouble, especially in times of economic crisis, she tries to make the most of the CFA."

He said the issue of the file is there, "would devalue the CFA and France to better withstand the crisis."

For him, the consequences of a devaluation would be catastrophic. such measures are even capable of creating "an implosion," as "the living conditions of populations would deteriorate."

He also believes that countries in the franc zone could not cope with a further devaluation if any, have nothing more to be exported - mostly to Europe and France - as raw material without being able to reduce their imports.

Substantial advantages for France but a real economic and social threat to Africa ... Sanou Mbaye also considers that the high exchange rate of CFA allows French companies like Bouygues, Societe Generale, BNP Paribas, Bolloré, évitertoute of depreciation of their gain.

For several weeks, authorities and bankers are reassuring in the face of rumors that are going well ... but do not we say that there is no smoke without fire?
Thus, in an interview published last December in the Senegalese weekly Nouvel Horizon, the director in Senegal National Bank of Central African States (BCEAO), Fatimatou Zahra Diop, had hoped given some arguments arguing against a possible devaluation of the CFA.

His arguments? the financial remembered as "the current situation of the WAEMU countries is marked by an increase in growth from 2.9% in 2006 to 4.3% in 2010 in a context of control of inflation limited to 1.4% in 2010. "

It also noted that foreign exchange reserves of the BCEAO are at a satisfactory level, as it ensures a coverage rate of the currency well above the standard of 20% required.

"With regard to the balance of payments of the countries of the UEMOA (Economic and Monetary Union of West Africa), with the exception of 2008 strongly affected by the global food and energy crises, the overall balance remained in surplus during the last five years, from 129.2 billion in 2005 to 674,100,000,000 in 2011, "she stated as well.

Of course, she acknowledges "the international context marked by a severe financial crisis affecting all major countries raises questions, given the difficulties of the euro and its consequences on the CFA franc."

"We would, in this regard indicate that it was never, since January 1994, when fixing the current exchange rate, to consider a change in the parity of the CFA franc vis-à-vis the the euro, "she insisted.

"In a context of globalization, she said, when a country or area has a convertible currency pegged to another currency at a fixed parity, changes in the market during the latter have different impacts both in terms of advantages than disadvantages, "she added.

"The eventual choice of the indexing of the CFA franc to a basket of currencies like the current tie to the euro, has advantages and disadvantages," she said, noting that "the only sustainable competitiveness is gained through internal efforts to improve the availability of production factors and accessibility. "