Historical Sketch

In the 1840s, France began expanding its colonial empire in Africa. In 1910, the four colonies of Gabon, Middle Congo, Chad and Ubangi-Shari were united into the general governorate of French Equatorial Africa. During the German occupation of mainland France in World War II, the French government-in-exile established its head quarter in Brazzaville (Congo) in 1940, creating so-called "Free French Africa" out of French Equatorial Africa. At the time, French West Africa had remained loyal to the Vichy government and switched allegiance only in late 1943. After the Second World War, the French Union was created in 1946 between France and its colonies, then restyled overseas territories. The loss of the south-east Asian territories reduced the Union to mostly African territories. The 1958 constitution intended a limited self-governance of the African territories under the Umbrella of the "French Community". Guinea rejected the constitution altogether, voting for independence, while the others partly opted for joining the Community, partly for the status-quo (Gabon opted for adherence to France as an overseas department). In 1960, all the territories attained full independence. The states that formerly made up French Equatorial Africa subsequently formed an economical community.

Monetary History Overview

The Franc accounting was uniformly applied in all territories, based on a colonial law of 1826. No separate colonial bank was chartered in the Equatorial African colonies, but the region was part of the jurisdiction of the Bank of French West Africa (in Dakar). No distinct currency was introduced until World War II and the German occupation of mainland France. The French government-in-exile established its head quarter in Brazzaville (Congo), while at the time French West Africa had remained loyal to the Vichy government. In 1941, the Central Bank of Free France (in 1944 renamed into "Central Bank of Overseas France") began operations. Distinct money was issued, and the notes of the Bank of French West Africa were withdrawn. Thus emerged the French Equatorial African Franc, as separate currency. It decoupled from the metropolitan currency and re-pegged to the British Pound, implementing a monetary agreement between Great Britain and the French government-in-exile.

After the Second World War, France reorganised the monetary system of its colonies. In December 1945, common currency areas were created for West Africa, Equatorial Africa and Indian Ocean territories (Madagascar, Comoros, Reunion). Their currencies were all on par with each other and pegged to the mainland currency. The French devaluation of October 1948 was implemented only in September, so that for a short time the three CFA Franc variants re-pegged to the British Pound again. The Central African CFA Franc (wherein CFA originally stood for "French colonies in Africa", nowadays for "Financial Cooperation in Central Africa") was initially issued by the Central Bank of Overseas France. The Currency Institute for French Equatorial Africa and Cameroon temporarily took over in 1955, to be succeeded by the Central Bank of the Equatorial African States and Cameroon in 1959, later renamed into Bank of the Central African States. A year later the constituents of French Equatorial Africa all attained independence. All other countries decided to keep the Central African CFA Franc as common currency. The colonial monetary order was replaced by treaties on economic cooperation between France and the different countries, and the common currency area gradually developed into a monetary union. The seat of the central bank remained in Paris until 1977 when it relocated to Yaoundé (Cameroon). The Central African CFA Franc remained pegged to the French Franc, and to the Euro after 1999, with a parity guaranteed by the Bank of France. In return, 50% of the currency reserves of the member states had to be deposited at the French central bank. In January 1994, the CFA Franc got devalued by 50%, the parity has remained unchanged since then. The 2019 movement in the West African CFA Franc area to sever the links to France and rename and reconstitute the currency has not been echoed in the Central African monetary union so far.

In 1960, five countries had adopted the Central African CFA Franc, Cameroon, Central Africa, Chad, Congo, and Gabon. In 1985 joined Equatorial Guinea the common currency area, the first country not originating from the former French colonial empire.

Currency Units Timeline

Currency Institutes Timeline

Monetary History Sources