Alliance of Sahel States (AES) Pushes to Exit the CFA Franc with Economic, Political and Geopolitical Dimensions

The statement “Sovereignty Begins with Currency, AES Will Exit CFA Franc,” attributed to Niger’s Foreign Minister, reflects a growing sentiment among some West African nations, particularly those in the Alliance of Sahel States (AES)—Niger, Mali, and Burkina Faso. These countries, all under military leadership following recent coups, have expressed intentions to distance themselves from the CFA franc, a currency tied to the euro and historically linked to French colonial influence. The AES views the CFA franc as a barrier to full independence, arguing that true sovereignty requires control over their own monetary system.

The CFA franc, used by eight West African countries in the West African Economic and Monetary Union (UEMOA) and six in Central Africa, has long been a point of contention. Critics argue its peg to the euro and past requirements to deposit reserves with the French Treasury limit economic autonomy, keeping these nations tethered to France. Proponents, however, highlight its role in providing stability and low inflation in a volatile region. The AES countries, having already withdrawn from the Economic Community of West African States (ECOWAS) in January 2024, see exiting the CFA franc as a logical next step in asserting sovereignty.

While the Nigerien Foreign Minister’s statement signals intent, no concrete timeline or detailed plan for a new currency has been universally confirmed across the AES. In late 2023, the finance ministers of Niger, Mali, and Burkina Faso discussed forming a monetary union, and Niger’s junta leader, Abdourahamane Tiani, has echoed the need for a currency shift. However, Mali’s finance minister in early 2024 noted the country’s continued UEMOA membership, suggesting uneven commitment within the AES. Economists warn that abandoning the CFA franc poses significant risks—such as managing existing CFA-denominated debt, ensuring convertibility, and maintaining economic stability—especially for agricultural economies with limited industrial bases.

The push reflects broader anti-French sentiment and a desire for self-determination, but the practical challenges are steep. A new AES currency would require robust institutions, coordinated policies, and likely years of preparation to avoid economic turbulence. For now, the statement is more a declaration of principle than a finalized policy, resonating with those who see the CFA franc as a colonial relic, yet leaving open questions about execution. Moving away from the CFA franc, which is pegged to the euro and backed by France, could destabilize the economies of Niger, Mali, and Burkina Faso. A new currency would lack the inherited credibility of the CFA, potentially leading to inflation, exchange rate volatility, and loss of investor confidence.

Much of the AES countries’ public and private debt is denominated in CFA francs. A new currency could complicate repayment, especially if it depreciates rapidly, increasing the real cost of servicing euro-linked obligations. The CFA franc facilitates trade within the UEMOA zone and with Europe due to its stability and convertibility. A new AES currency might weaken regional trade ties, particularly if neighboring countries remain on the CFA, creating exchange barriers. While a local currency offers control over monetary policy—potentially allowing AES states to print money or adjust interest rates to suit domestic needs—it sacrifices the stability provided by the CFA’s euro peg.

These nations, reliant on agriculture and raw material exports e.g., Niger’s uranium, may struggle to manage external shocks without a strong institutional framework. Designing, producing, and distributing a new currency, alongside building independent central banking systems, would demand significant resources—resources these countries, already strained by conflict and sanctions, may not have readily available. Exiting the CFA franc could bolster domestic support for AES military regimes by framing it as a rejection of colonial legacies, tapping into widespread anti-French sentiment. This could solidify their legitimacy amid political instability.

The move risks deepening divisions in West Africa. ECOWAS and UEMOA, already weakened by the AES exit from the former, could face further strain if a rival monetary bloc emerges, undermining decades of regional integration efforts. Not all stakeholders may support this shift. Urban elites, businesses tied to international trade, and populations accustomed to the CFA’s reliability might resist, creating internal tension or unrest. A successful exit would mark a significant blow to France’s economic and political leverage in the Sahel, accelerating its waning influence as AES states pivot toward partners like Russia, China, or Turkey, who have already increased military and economic engagement in the region.

The AES might seek technical and financial support for a new currency from non-Western powers. Russia, for instance, could offer backing as part of its broader strategy to counter Western influence in Africa, though its own economic constraints might limit this role. If the AES succeeds, it could inspire other CFA-using nations—like Senegal or Cote d’Ivoire—to reconsider their monetary arrangements, potentially destabilizing the broader CFA zone and prompting a wider reconfiguration of African economic alignments. Economic instability from a botched currency transition could exacerbate security challenges—such as insurgencies linked to Boko Haram or ISWAP—by straining budgets for military and social programs, especially if Western aid tied to ECOWAS or French partnerships dries up.

The AES’s ambition reflects a global trend of nations seeking greater autonomy in a multipolar world, but the practical hurdles are daunting. Ghana’s cedi and Nigeria’s naira, both independent currencies, have faced depreciation and inflation pressures, offering cautionary tales. Success hinges on the AES’s ability to coordinate policies, build trust in a new currency, and secure external backing—all while managing ongoing crises like jihadist insurgencies and food insecurity. Failure, conversely, could deepen poverty and isolation, making the statement’s bold vision a double-edged sword. For now, the implications tilt toward disruption, with the outcome depending on execution rather than intent alone.