Bassirou Diomaye Faye, the President of Senegal, outlines the path for the possible dissolution of the CFA franc. Three alternatives are being considered to ensure Senegal’s monetary sovereignty, ranging from the establishment of a shared currency within ECOWAS to the establishment of a national currency. This statement comes amid a debate on the future of the CFA franc, with some comparing it to a vestige of Françafrique.

Towards a regional currency

President Faye initially spoke of the possibility of a shared currency within the Economic Community of West African States (ECOWAS). This alternative, while optimal for regional integration, appears to be facing administrative delays. “The slowness of the process is deplorable,” he noted during his speech on April 4, Senegalese Independence Day.

Faced with these delays, another option is emerging within the West African Economic and Monetary Union (WAEMU). This alternative would promote faster adoption of a shared currency while preserving a certain economic balance. “The West African Economic and Monetary Union (WAEMU) offers an option,” he stated, highlighting the need for a tangible measure.

The Option of a National Currency

If regional alternatives take time to materialize, Senegal could consider establishing its own plan. While this decision represents a powerful symbol of sovereignty, it requires detailed preparation. “However, if it takes time, we will begin minting our own currency,” warned President Faye.

The President, aware of the challenges, emphasized the preconditions for such a transition. “It is necessary to stabilize aggregates and ensure macroeconomic security,” he emphasized. This statement indicates a desire to carry out a carefully considered and responsible transition, taking into account the country’s economic realities.

The Challenges of a Monetary Transition

Senegal faces considerable challenges with the possible exit from the CFA franc, regardless of the option chosen. This requires a complete restructuring of the financial system, as well as the adjustment of societies and individuals to a new approach. During this transition phase, the government will also need to ensure economic stability and control inflation.

President Faye expressed his resolve to effectively lead this transition, emphasizing the need for a gradual and coordinated approach. “It is impossible, in just one year, to tell ECOWAS that we wish to abandon its currency or WAEMU that their procedures are ineffective and instantly initiate a monetary process.” This statement demonstrates a desire for dialogue and collaboration with regional actors.

Regional Economic Context

This approach comes at a time when several West African countries, such as Mali, Niger, and Burkina Faso, grouped within the Confederation of Sahel States (ESA), are also exploring solutions to strengthen their monetary sovereignty. The Senegalese president’s statements could revive discussions within regional institutions on accelerating monetary reforms and establishing a common currency.