Currencies

Senegal’s opposition hopes promise of new national currency will win votes

The economy is expected to prove a key issue in Senegal’s upcoming elections. With campaigning for the 24 March polls in full swing, the opposition coalition says replacing the colonial-era CFA franc with a national currency would be the best way to tackle inequality and boost employment.

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The opposition coalition launched its campaign platform on 10 March with a promise to create a new national currency.

Leading opponent Bassirou Diomaye Faye, a key figure in the protests that followed the postponement of the February polls by President Macky Sall, is seen as a strong contender among the 19 candidates for the presidency. 

In his 84-page election platform, Faye says Senegal needs to take back control of its economy.

“Convinced that full independence cannot be achieved without controlling the economy, livestock management, fisheries, and agriculture, we are fully committed to achieving food, digital, fiscal, energy and scientific sovereignty,” he writes.

Colonial tools

The idea of a new currency is popular among some people in Senegal, who think that the CFA franc, the shared currency inherited from French colonial rule, isn’t helping an underdeveloped economy.

The CFA franc was created as an alternative to the dollar and is used in 14 countries in Central and Western Africa.

Development economist Ndongo Samba Sylla told RFI that Senegal would be “better off if it had its own currency system, not one that was designed to serve colonial and external interests”.

“All the countries using the CFA franc are still poor,” he says.

Gabon, Equatorial Guinea and the Republic of Congo in particular “should be very rich, like Dubai”, because of their vast resources, he claims.

Development economist Ndongo Samba Sylla in Dakar, Senegal, on 27 February, 2024.
Development economist Ndongo Samba Sylla in Dakar, Senegal, on 27 February, 2024. © RFI/Melissa Chemam

Asymmetrical system

The CFA franc was created in 1945 to counter US dollar hegemony, Samba Sylla explains.

“The French economy at the time was in very bad shape and needed to have access to raw materials – but not priced in US dollars, because France did not have enough dollars.”

The CFA franc allowed France to bypass the dollar and buy imports needed by French industry such as uranium, manganese and oil, he says.

Samba Sylla wonders if the international monetary system created for industrial countries after World War II is fit for purpose for an economy such as Senegal’s.

“We live in a global economic and financial system that is asymmetrical,” he says.

The Bretton Woods economic and financial system, brought about in 1944 when much of the Global South was colonised, “does not work for us”, he insists. 

If the world is to address global challenges like climate change, he says, “we need to change the system that has been created by and for the victors of World War II”.

Knock-on effects

If Faye is elected, the coalition’s plans for a new currency could have significant implications not only for Senegal, but for the eight-nation West African Economic and Monetary Union.

The juntas in power in Mali, Niger and Burkina Faso have already announced that they envisage leaving the CFA system.

Supporters of the coalition of anti-establishment candidates sit in front of a banner of presidential candidate Bassirou Diomaye Faye during a campaign rally in Dakar, Senegal, on 10 March 2024.
Supporters of the coalition of anti-establishment candidates sit in front of a banner of presidential candidate Bassirou Diomaye Faye during a campaign rally in Dakar, Senegal, on 10 March 2024. © AFP – JOHN WESSELS

A new currency would also impact Senegal’s plans to become an oil producer, already slated for this year.

Faye’s proposals also include tax and customs reforms and the renegotiation of contracts related to mining, hydrocarbons, public procurement and infrastructure, all of which could rile both allies and investors.

Democracy hasn’t paid

Most other parties, however, dismissed the need for a local currency.

“In Senegal, the lack of leadership has been a very crucial element explaining why the country is still poor,” according to Samba Sylla.

He blames the absence of consensus between the political class, civil society, and the private sector.

“There have been countries that went through devastating civil wars that managed to develop,” he says.

“There has been no economic dividends from our so-called democracy and political stability, and that’s unfortunate.”

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