Pegged to the euro at a fixed exchange rate, the CFA franc offers WAEMU countries a monetary environment characterized by moderate inflation and relative exchange rate predictability. This structure, guaranteed by France and backed by the Central Bank of West African States, has long been presented as a factor of stability in a region exposed to external shocks. The resulting monetary discipline helps to contain inflationary spirals and reassure investors.

But this strength has a downside. When the euro appreciates against the dollar or Asian currencies, the CFA franc automatically follows suit. For economies whose exports are often denominated in dollars and whose competitiveness largely depends on price, a currency perceived as strong can increase the cost of goods on international markets. The agricultural sector, emerging industries, and certain manufacturing activities then feel the effects of this exchange rate fluctuation.

The debate takes on a concrete dimension during periods of international currency divergence. If the euro strengthens, products from the WAEMU region become relatively more expensive for foreign buyers, while imports denominated in dollars may appear cheaper. This situation encourages the consumption of imported goods and can exacerbate trade imbalances.

However, the argument for an overly strong currency cannot be isolated from other determinants of competitiveness. Logistics costs, energy prices, labor productivity, and access to financing often have a greater impact than the exchange rate alone. Currency depreciation, if not accompanied by efficiency gains, can quickly lead to higher domestic prices without a lasting improvement in exports.

The stability offered by pegging to the euro also plays a role in debt management and financial flows. A predictable currency reduces exchange rate risk on external liabilities and facilitates fiscal planning. In economies where the share of imports in consumption remains high, controlling inflation protects purchasing power, particularly for food and energy products.

The paradox of the CFA franc lies in this duality. What secures the macroeconomic environment can, in certain situations, limit competitive adjustment through the exchange rate. The issue is not simply a question of stability versus external performance. It relates to a choice of model: prioritizing a strong monetary anchor and focusing on productivity, or seeking greater flexibility at the cost of increased volatility.

In an uncertain global context, the debate remains open. Competitiveness depends not only on the nominal value of a currency, but also on the ability of economies to produce efficiently, diversify their exports, and reduce their structural costs. The CFA franc's peg to the euro provides a framework. However, economic performance is determined far beyond the exchange rate alone.