The Geography of Influence
WAEMU (West)
• Benin
• Senegal
• Burkina Faso
• Togo
• Côte d'Ivoire
• Niger
• Guinea-Bissau
• Mali
CEMAC (Central)
• Cameroon
• Congo
• C.A.R.
• Eq. Guinea
• Chad
• Gabon
The Trade-Off: Stability vs. Growth
The Stability (Benefit)
85% Stability
Low Inflation
Predictable prices allow for long-term planning and shield the middle class from the currency collapses seen in neighboring non-CFA states.
The Sovereignty (Cost)
30% Control
Economic Stasis
No control over interest rates. When raw material prices crash, the people take the hit through budget cuts because the currency cannot devalue.
The "Import Trap"
"When your money is too strong, you import French bread instead of baking with your own grain."
01.
Cheaper Imports
Local farmers cannot compete with subsidized foreign goods made cheap by the strong peg.
02.
Dead Industry
Why build factories when it is cheaper to import finished clothes or tools from Europe?
03.
Resource Drain
Economies stay trapped in raw material exports (cocoa, oil) to pay for basic foreign goods.