CFA franc: note proposes three scenarios for the euro peg

Editorial responsibility

Editorial responsibility: Paul Arnaud DEGUENON, journalist and business development expert.

Read our editorial charter · Report a correction

Lo Ciré Gaydel calls for comparing several exchange rate regimes and better financing for the productive sectors of the WAEMU, in a contribution published on 2 November.

The fixed peg of the CFA franc to the euro should be assessed in light of its effects on production, employment and investment in West Africa, Lo Ciré Gaydel argues in a contribution published on Monday 2 November 2026. The author proposes examining three monetary scenarios and strengthening the financing tools available to businesses in the West African Economic and Monetary Union (UEMOA).

The first option would keep the current exchange rate while developing the instruments that finance the economy. The second would examine a more flexible exchange rate regime, while the third would combine regional monetary integration with reinforced mechanisms for productive activities. The note does not call for an immediate devaluation and does not constitute a decision by the Central Bank of West African States (BCEAO).

On access to credit, Lo Ciré Gaydel recommends studying targeted bank refinancing mechanisms for agriculture, agro-industry, manufacturing and infrastructure. The eligibility of projects would rest in particular on their repayment capacity, their contribution to employment and their export potential. He also recommends adapting financing terms to production cycles.

A fixed peg and risks to be measured

The CFA franc of the eight UEMOA states remains pegged to the euro at the rate of 655.957 francs to one euro. The reform of monetary cooperation launched in 2019 ended the mandatory centralisation of foreign exchange reserves at the French Treasury and the presence of French representatives on the relevant bodies. It retained the fixed peg as well as the French guarantee of convertibility.

The contribution notes that a more flexible exchange rate could allow certain adjustments in the face of economic shocks, but that a depreciation would also make imports, equipment and debt service denominated in foreign currency more expensive. The author therefore recommends comparing the consequences of each option for inflation, purchasing power, exports, foreign exchange reserves and external debt before any reform.

Its method first provides for a comparative diagnosis of UEMOA economies and a measurement of financing needs by sector. It then includes economic simulations, the trial of targeted schemes under prudential supervision, and a debate involving the states, the BCEAO, businesses and financial institutions.