Economist Lubinda Haabazoka, director of the Graduate School of Business at the University of Zambia, has weighed in on the ongoing debate over the CFA franc, a currency used by 14 African countries. In recent remarks, Haabazoka highlighted the system's implications for African monetary sovereignty and financial dependence.
The CFA franc, pegged to the euro and guaranteed by the French Treasury, has been criticized for limiting the monetary policy autonomy of member states. Haabazoka argued that while the system provides stability and low inflation, it also perpetuates economic dependency by requiring member countries to keep 50% of their foreign reserves in the French Treasury.
Reforms announced in 2019, including the renaming of the West African CFA franc to the Eco, have not yet been fully implemented. Haabazoka emphasized that true monetary sovereignty would require African nations to have greater control over their currencies and economic policies, though he acknowledged the challenges of transitioning to independent monetary systems.
The economist's comments come amid broader discussions on the African Continental Free Trade Area (AfCFTA) and the potential for a common African currency. Haabazoka noted that while a single currency could boost intra-African trade, it would require strong political will and economic convergence among member states.
