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Mozambican Gas Export Doubled in 2015



The export of Mozambican natural gas has doubled in 2015 to approximately 115.4 million giga-joules, announced the Mozambican Ministry of Mining Resources and Energy Production. The  increased export is consistent with the potential to turn the south African country into the world’s 2nd largest exporter of Liquefied natural Gas by 2020.

The announcement was made by Mozambican Minister of Mining Resources and Energy, Pedro Couto, during the opening of a session of the Coordinating Council of the Ministry that convened on Tuesday and Wednesday last week.

Couto also announced that the production of natural gas had increased by 8% but added that the falling hydrocarbon prices on the global market have put a dent into commitments to exploration activities in the country.

Couto noted that negotiations were underway to begin the development of natural gas reserves discovered in the Rovuma basin and that the Ministry expects production to start between 2020 and 2021.

The chairman of Mozambican state oil and gas company ENH, Omar Mitha said recently that oil companies operating in Mozambique would invest US$31 billion in the coming years to begin exploration of the natural gas reserves discovered in the north of the country.

A survey from 2012 showed that Mozambique is poised to become the world’s second-largest exporter of Liquefied Natural Gas by 2020. Mozambique has, besides vast gas resources, one of the world’s largest, yet untapped coal reserves. The country also about doubled its export of coal to Brazil.

The Frelimo government aims at a balanced economic model that combines State control with free market mechanisms, investments in infrastructure to increase the quality of life of Mozambican citizens, and investment into a Sovereign Wealth Fund.

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Mystery about Germany´s Gold in the US Solved



Nobody wants to admit it openly. The German Gold Reserves in the United States are gone, used for financing the United States war chest and bet for “Global Full Spectrum Dominance”. So why is even the German Federal Bank trying to avoid further speculation by referring to a non-existent “full transparency” ? The answer is quite simple. Nobody wants the current backwardation of the gold market to turn into a permanent backwardation of the gold market. The consequence would be the inevitable collapse of global trade and civilization as we know it.

nsnbc international report from April 2013 “in the money” – “to take to the bank”. In April 2013, nsnbc international published a report by nsnbc contributor, Prof. Long Xinming, revealing that the German government had asked to visit the vaults of the US Federal Reserve to determine the actual existence of the German gold reserves.

Germany has deposited about half of its gold reserves in the USA. The FED refused to permit Germany to examine its own gold, stating “security” and “no room for visitors” as reasons. Nothing else.

When Germany finally was “permitted” an audit, the auditors were admitted into the vault´s anté chamber where 5 or 6 gold bars were shown to them as “representative for Germany´s holdings”.

The German auditors apparently returned a second time, when the FED granted them permission to “look into” 1 of 9 rooms without allowing them to enter or touch the gold, before the auditors were sent back home to Germany. The report on nsnbc prompted worldwide discussions.

In July 2013, the US American hedge-fund manager William Kaye created a stir when he picked-up the ball, stating:

” Germany won´t ever see its gold again…… Central Banks, such as the FED, where most of the reserves had been deposited, had lent the gold to U.S. Banks such as Goldman Sachs and JP Morgan.

The gold has been used in the market to lower the gold price and the FED has received securities in exchange…. Germany won´t ever see that gold again, because it is safely kept in my accounts and the accounts of our investors”.

William Kaye, who previously has been working for Goldman Sachs is by no means a “nobody” on the global markets, and the fact that his statement caused a stir was less surprising than the surprise non-insiders got when they heard the news about Germany´s gold. In fact, nsnbc´s initial report was doubted by many but was, as it turned out right “in the money”, one could, so to speak, take our report to the bank.

German Federal Bank. A Real Embarrassment and Non-Existent Transparency. Not surprisingly either, is the fact that the situation became an embarrassment for the German Federal Bank, Deutsche Bundesbank (DB).

A DB speaker said, that the Deutsche Bundesbank told the German financial publication “Deutsche Wirtschafts Nachrichten” (German Market News), that the DB does not want to comment on the statement and referred to the full transparency which it had provided about the German gold reserves in January 2013. “The situation” said the DB spokesperson, “has remained unchanged since then”. The statement however, was only 50 % true. The true 50 % of the statement is, that the Deutsche Bundesbank does not want to comment.

The untrue 50 % is the statement about the purported full transparency which the DB has provided in January 2013. While it is understandable that it is an embarrassment that one´s purported “ally“, whom many Germans consider more of a political, economical, cultural and not to forget military occupier rather than an ally, has the audacity to put Germany´s auditors off with “no place for visitors” and shows them 1 of 9 chambers, “but don´t enter and touch” after protests from Berlin, is understandable.

After all, no German functionary would ever be allowed to, and no German politician in his right mind would ever dare to say, that “Germany still has not regained its full sovereignty”without risking the carrier – or more.

But talking about full transparency is equivalent to literally ask for trouble from one´s compatriots.

The demand that Germany repatriate its physical gold reserves is becoming increasingly outspoken, and not only among German patriots and conservatives like Member of Parliament for the Christian Social Union, CSU, Peter Gauweiler.

After all, it can hardly have escaped the DB spokesperson and German as well as international observers, that Germany´s Federal Accounting Office has issued a statement in late 2012, in which it criticized the Deutsche Bundesbank because it had not ever had any of its staff to personally audit the German gold reserves abroad. That is, “Not Ever”.

No Audit of German Reserves “Ever”. Deutsche Wirtschafts Nachrichten (German Market News) also asked the DB spokesperson whether any of the German Federal Bank´s officials has ever taken to Paris or the USA to personally audit the German gold reserves. The DB spokesperson replied, or rather tried to avoid answering the question, saying:

“The Deutsche Bundesbank has, with regard to the storage, appropriate storage and deposit contracts with those Central Banks with whom the gold is being deposited”.

He then added, that these contracts, however, were subject to confidentiality, and by the way, he added,

“the Chair for Cash, Settlements and Payment Systems of the Deutsche Bundesbank, Carl-Ludwig Thiele had said in January that he had been there”.

Given this answer, the journalist probably knew that his job would be entering the “Danger Zone” if he would have asked:

” Was there ? Where ? In France ? In New York ? Did Herr Carl-Ludwig Thiele inspect the gold and how much was there ? Is it documented anywhere ? Can I see a copy ? I mean, we are speaking about full transparency right ? ”

An ode to independent media! So, the poor German journalist could keep his job, the Bundesbank spokesperson was proud about his evasive PR skills and that he could keep his job, and we remain in the dark. Everybody is happy. Right ? Business as usual !

The effect of the Deutsche Bundesbank´s complicity in covering-up the obvious theft of Germany´s gold reserves by Germany´s occupying ally USA, the United States blatant arrogance in dealing with his “Trans-Atlantic Partners in Germany” however is beginning to backfire.

How much longer the scandal can be contained is becoming increasingly questionable, and Germans begin to organize themselves to demand the repatriation of the country´s gold reserves.

A group of renown Germans, including the member of the European Taxpayers Association, Rolf Baron von Hohenhau, Peter Boehringer of the German Precious Metals Society, M.P. Frank Scäffler, Author and former IBM Germany CEO, Prof. Hans O. Henkel, Ralf Flier, the Editor in Chief of Smart Investor Magazine, and numerous others have organized themselves in the Association “Repatriate Our Gold” (Holt unser Gold Heim)

The Co-Initiator of the Initiative, Peter Boehringer, states that he considers it absolutely plausible, that the German gold reserves no longer exist within the USA in terms of physical gold bars. Moreover, Boehringer states, that one can strongly suspect it. Boehringer concludes:

“We do believe the Deutsche Bundesbank in its statements, but we do not believe that the Bundesbank can believe what its contractual partners say. The Deutsche Bundesbank simply cannot be sure, that the gold reserves still are present at the FED in the form of gold bars” .

“The Bundesbank does not even officially claim this, or cannot prove the physical presence according to appropriate principles of accounting. The Bundesbank has officially informed us, that the depots and Partner Central Banks have a marvelous integrity, and that the doubts, which we have forwarded in the form of questions, are unsubstantiated”.

He then, correctly remarks the fact which the Bundesbank obviously attempts to omit, which is, that the FED has not performed any official audit of its gold holdings since 1953, and the fact that the Americans they don´t even trust the FED. Ask any US citizen in any major city in the USA and ask: “Can the FED be trusted?”. If you can ask the question with a straight face, people will either believe that you are retarded or that you are part of a new “Candid Camera show”.

Repatriate Our Gold therefore demands, that the Deutsche Bundesbank publishes all the lists with the gold bar numbers of gold bars, which are deposited abroad as well as in Germany.

The question one may ask is, whether the publication of the gold bar numbers would add any credibility to the claims that the gold is physically present, and the ultimate proof can only be given by a full inspection, rather than a dog and pony show, in which German auditors at the fed are shown one out of nine vaults “but don´t enter and don´t touch”. Repatriate Our Gold is therefore still insisting on a full, physical audit of the gold.

Repatriate Our Gold warns, that the repatriation of the German gold reserves from the USA and France by 2020, as the Bundesbank states it would, is far from sufficient. Boehringer states, that the Bundesbank seem to be betting on time because, as he states:

“If German gold reserves really have been used as collateral, one will first have to buy them back”.

And here, Boehringer is touching the most touchy of issues. It is correct, that the FED would first have to buy the gold before it could deliver, but the trouble is, that the gold-market has been in backwardation since early July 2013. To buy gold requires that there is someone who is able and willing to sell gold, and with the market being in backwardation that is impossible.

According to a nsnbc international report with World Bank whistleblower Karen Hudes, we may be facing a global currency war as corruption at the World Bank unsettles the gold market. Karen Hudes has worked 20 years as legal counsel at the World Bank´s legal department. Hudes was sacked in retaliation after she blew the whistle and reported massive corruption in the Bretton Woods institutions.

Hudes has since been reinstated, but the US administration continues its retaliation, and is, as a stakeholder analysis shows, under arrest of a conglomerate or megabank, has Hudes describes it, which prevents that the USA begins to comply with international accounting standards.

Already in May, Hudes warned that the consequence of failure to address the problems would be a permanent backwardation of the gold market and a global currency war that would, one started, grind world trade to a standstill. Moreover, Hudes states:

“A stakeholder analysis derived from accurate game theory modeling shows a clear fork in the road for the United States: rule of law and the transatlantic alliance or corruption and the ascendency of China.”

It may very well be that the United States and Germany, the FED and the Deutsche Bundesbank perceive it as being in their shared interest to cover-up the fact that Germany´s gold is gone, that:

” Germany won´t ever see its gold again…… Central Banks, such as the FED, where most of the reserves had been deposited, had lent the gold to U.S. Banks such as Goldman Sachs and JP Morgan. The gold has been used in the market to lower the gold price and the FED has received securities in exchange…. Germany won´t ever see that gold again, because it is safely kept in my accounts and the accounts of our investors”.

as William Kaye said it. The shared interest would in that case be the attempt to prevent the permanent backwardation, the subsequent currency war and the grinding of world trade to a hold. The problem for both the FED and the Bundesbank is, that the “Gini has left the bottle”, the truth is out and no complicity of silence will make it return into the bottle on its own volition. More simplified: “How to get the paste back into the tube?”.

When push comes to shove we will see that the German gold and the gold of numerous other countries who deposited their gold in the USA after WW II has been used to line the pockets of the US military industrial complex and has financed the US bet for global, full-spectrum dominance. Not surprisingly, many, especially older Germans come to think “Dresden and Pforzheim” when they are confronted with that fact.

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French Africa Policy Damages African and European Economies.



Since the independence of the former French colonies in western Africa they are in spite of the richness of their natural resources and the productivity of their populations still catastrophically under-developed.

In 2007 the French and European economies began deteriorating into a devastating recession. France seems to be like a man who is standing at the edge of a cliff, transfixed by the thought of falling into the abyss. In fear of losing the lucrative racket of controlling the western African economies he forgets that there is Terra firma and a possibility for both French, European and African prosperity behind him. Africans and leading European politicians expected that the administration of President Hollande would bring much-needed change with respect to French control over the economies of Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Equatorial Guinea, Ivory Coast, Gabon, Guinea-Bissau, Mali, Niger, the Republic of Congo, Senegal and Togo. However, also Hollande´s administration seems to be so transfixed by the prospect of falling into the abyss that it does not fathom the possibility of taking one step back.

Will France remain transfixed in fear and drag western Africa and Europe with it when it falls or does it dare to loosen up its grip on control over the good old CFA racket in its former colonies and discover the true potential and value of the African markets. As painful as it may be, the primary prerequisite for a progressive development and prosperity is the truth about the current state of affairs.

The root causes for the lacking development of the western African economies are closely related to the fact that France, contrary to other former colonial powers, managed to install its commissars at the heart of its former colonies economic and monetary system and that it still maintains almost unchallenged control over them. The system was created by German National Socialists during the 1930s and 40s. It was used to usurp France and other German occupied nations.

The Genesis of the CFA-System in Nazi Germany and the German Occupation of France.

On 9 Maj 1941 Hemmen, the German Ambassador to France declared that he had signed a treaty with the French Admiral Darlan. The treaty would place German commissars within the French National Bank´s departments for foreign currencies and international commerce.(1) The treaty was negotiated under the auspices of German Minister of Finance Herman Göring, whose father, Heinrich Ernst Göring has been the German Governor of German West Africa, todays Namibia, from 1885 to 1890. Herman Göring was among other notorious for his plundering the occupied nations’ economies through operations accounts and for his special interest in treasures and art from the German occupied areas.

At the end of world war two and the occupation of France, the French President Charles de Gaulle created the CFA Franc as a currency for the western African colonies. De Gaulle created a monetary union whose functions of control were based on the model Germany had used to usurp German occupied France.

Even though the colonies have since gained independence, the system of almost absolute control over their economies by the installment of commissars with the Central Banks of the West African Monetary and Economic Unions, the B.E.A.C., the B.C.C., and the B.C.E.A.O. persists.

Modo-Colonialism, the Veto Right by French Commissars over African Economies.

Together, Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Equatorial Guinea, Ivory Coast, Gabon, Guinea Bissau, Mali, Niger, the Republic of Congo, Senegal and Togo, establish the Monetary and Economic Union of West Africa (U.M.E.O.A. / UMEAO. Their currency, the CFA-Franc is printed under supervision of the French National Bank in Charmaliéres, France. The Council of Presidents of the fifteen U.M.E.O.A. member states constitutes the highest authority of the union. Decisions of the Presidential Council are made unanimously. The Ministerial Council of the U.M.E.O.A. defines the monetary and credit policy of the union and it is responsible for the economic development of the region. According to the constitutions of all fifteen member states the creation of their currency, the regulation of its value as well as the regulation of parities and modalities is the exclusive privilege of the nation and its people and decisions about it are made by the parliament.

The placement of French commissars within the heart of the nations and the union`s banking system however, creates an obvious dichotomy between the apparent sovereignty of the union, its constituents, and direct control from the previous colonial power.

Three of the thirteen of the Directors of the B.E.A.C. are French and four of the eight Directors of the B.C.C. are French. The Board of Directors of the B.C.E.A.O. is constituted by sixteen Directors; two from each country plus two additional Directors from France who take part in the management of the bank under the same conditions and with the same privileges as the other Directors. The number and placement of the commissars gives them a Veto right at the board of each of the Central Banks. No decision can be made without their approval and France can enforce its policy by threatening to deadlock the economies unless decisions are made in compliance with French suggestions.

The French Veto right also extends to the nomination of the Governor of the B.E.A.C.. The Governor is elected with the unanimous vote of the Board of Directors, on suggestion of the government of Gabon, and after the approval of the other member states as well as France.(2)

The Central Bank does not only have the privilege to create the currency. It also has the privilege to grant credit for the current accounts of the national treasuries at its discount rate. The Board of Directors is making the decisions about the temporalities and about the total amount that is granted for financing the economies of each of the member states.

Feeding France, Bleeding Africa – Current Accounts and the System of Usurpation.

While the primary instrument of control is the installment of French commissars, the primary instrument for usurping the western African economies is their current accounts. The member states agree to deposit their foreign currency reserves in a shared reserve fond.

The foreign currency reserves are subject to deposition in an operations account at the French National Bank. Between 1945 and 1973 one hundred per cent of the foreign currency reserves had to be deposited in the operations account, in 1973 it was reduced to sixty-five, and on 27. September 2005 to fifty percent. (3) Another fifteen percent is kept in a guaranty fund.

In other words sixty-five per cent of all foreign currency reserves of the fifteen nations and all revenue generated outside of the unions territory is kept at the French National Bank. On 3 Mai 2010 the website of Jeune Afrique quotes the former French Minister of Finance and Commerce, Christine Lagarde: “The Bank of the States of Central Africa, for instance, places an almost 90 per cent of their reserves in the French National Bank”. (4)

In 1960 Jean Boissonat, a member of the currency committee of the French National Bank wrote: “Almost all decisions were made in France .. The Franc Zone allowed France to deliver certain natural resources to itself without having to spend any foreign reserves. It was estimated that this represented two hundred and fifty million US-Dollar savings in terms of foreign reserves per year …” Boissonat continues by stating that approximately half a million Frenchmen in Paris receive their means of survival from the Franc Zone.(5)

The French socialist Jean-Noël Jeanny wrote in 1963 that: “all that the African nations achieve by increasing their export is the generation of more foreign currency reserves for France”.(6) He could as well have added “and the creation of debt for themselves”. Beside profiting on African foreign currency reserves which are returned to the West African nations in the form of debt, France is also profiting from African gold.

The gold reserves of the fifteen nations are kept in France, supposedly to guaranty for the value of the CFR Franc. In 2001 the West-African gold reserves at the French National Bank had an estimated value of 206,528 billion CFR Franc. In an interview for Le Liberation in 1996 the late President of Gabon, Omar Bongo said: “We are in the Franc Zone. Our operations accounts are managed by the French National Bank in Paris. Who profits from the interests that our money generates ? France.” (7)

France is indebting and enslaving Africans by means of Africa’s own wealth; for example: 12.0000 billion invested at three per cent creates 360 billion in interests which France grants as credits to Africa at an interest rate of five to six per cent or more. The allegory of “Bleeding Africa and Feeding France” is no exaggeration, not alarmist, and not revolutionary. It it is a sobering fact of French modo-colonialism and the cost in terms of under-development and human suffering is staggering. The current accounts and the French usurpation are a humanitarian disaster that is induced by France and financed by those who are suffering from it.

Coups, Crisis and French Finance-Nazism in Africa.

In 1996 France devalued the CFR Franc in spite of the protest of most western African nations. Former French Prime Minister Eduard Balladour justified the French dictated devaluation of the CFR Franc because “ it was considered to be the best possibility for aiding the development of the western African countries” (8), even though another statement by Balladoure indicates that he was aware of that the regulation of a currency is a matter of national sovereignty(9).

The late President of Togo, Etienne Gnassingbé said about the devaluation: “One uses to say that violence overrules justice. I was not the only one who issued the warning….. But France has decided otherwise. The African voices don´t count for much in this affair”.(10)

The words of the late Etienne Gnassingbé indicate that the Bleeding of Africa can be taken literally. According to the statutes of the monetary and economic union every member state is free to leave it. So much to theory. In practice, France has left a trail of post-modern coup d´etats, violence, and murder in those nations who tried to get out from under what many West-Africans perceive as French Finance-Nazism in Africa.

In January 1963 the President of Togo, the late Sylvanus Olympio was murdered three days before the issuing of a new currency.

On 19. November 1968 the late President of Mali Modibo Kéita was ousted in a coup and arrested. In 1977 Modibo Kéita died in prison. Kéita was poisoned.

On 27. January 1996 the President of Mali was ousted in a military coup d´etat.

On 15. March 2003 the late President of the Central African Republic Angè Félix Patassé was ousted by the “rebel leader” Francois Bozizé. In all cases the monetary union and France have played a role.

Ivory Coast´s President Laurent Gbagbo, France, the ICC and Modo-Colonialism.

When Laurent Gbagbo became the President of Ivory Coast one of his first official initiatives was the erection of a concrete wall in the tunnel that connects the French Embassy with the Presidential Residence. Gbagbo wanted Ivory Coast to abandon the CFA and institute a new regional and if possible a Pan-African, gold-backed currency. The initiative toward the establishment of a gold-backed Pan-African currency enjoyed the sympathy of many African nations and enjoyed unequivocal support from Libya, which until the so-called Arab Spring in 2011 was the richest and most developed of all African nations.

As if it was a conditioned reflex, France seemed transfixed by is fear of falling into the abyss, of losing the CFR racket that has kept the French economy afloat since it was conceived by de Gaulle in 1945. Rather than seeing a potential, France was biding its time until an opportunity for a post-modern coup d´etat. The 2010 Presidential elections in Ivory Coast. France sided with Alessanne Outtara. Libyan intelligence reports from 2009 and 2010 indicated that the French Intelligence Service D.G.S.E. had begun infiltrating, financing and arming a group of “rebels” in the northern region of Ivory Coast.

The outcome of the Presidential election was apparently very close. The electoral commission declared Alessanne Outtara the winner but the election result was disputed by Laurent Gbagbo.

There had been registered serious irregularities. In one particular village with a population of approximately ten thousand, Alessanne Outtara seemed to have received almost one hundred thousand votes.

Western mainstream media began building a narrative: The electoral commission had declared Outtara to be the winner. The despotic Laurent Gbagbo refused to hand over the reins of power to the winner of the elections. Gbagbo is cracking down on peaceful protesters. Gbagbo is cornered in his bunker…

What western media generally failed to report, underreported, or conveyed in a distorted and strongly biased fashion was that: Laurent Gabgbo and his party had brought the case to the Supreme Court; that the Supreme Court of Ivory Coast had recounted the votes; that the Supreme Court had taken notice of election fraud in favor of Outtara; and that the Supreme Court of Ivory Coast had declared Laurent Gbagbo to be the winner of the elections and the rightfully elected President of Ivory Coast. That French backed guerrilla began attacking predominantly pro-Gbagbo villages, committing massacres, and that French backed “rebels” were attacking the Presidential Residence.

What was emphatically reported in French and western media like the BBC was that “security forces” clamped down on peaceful protesters, and that “Ouattara´s Army” is cornering “Gbagbo in his bunker”.(11)

Nobody seemed to ask the important question. Where in the world had Outtara, who just claimed to have won the elections gotten an “army” from ?

It is symptomatic for the high prevalence of racism and condescending modo-colonialist reasoning among European populations that only very few commentators and analysts said:

“But the electoral commission is not the one who has the competence to approve of election results, it is the Supreme Court”.

A comparison can illustrate the point: When George W. Bush and Al Gore had the closest of all elections that have been held in the United States of America; who certified the election ? The Supreme Court, of course. (12)

Many Americans felt utterly disenfranchised but the population respected the Supreme Court. Could anyone have even thought about the remote possibility of “Al Gore´s Army cornering Bush in his Bunker” of “Gore neglecting the Supreme Court because the electoral commission had pronounced him to be the winner ?” And where in the world would Al Gore have gotten his army from Anyways ? And where did Alessanne Outtara get his army from ?

The capture of Laurent Gbagbo cost the lives of approximately 1.600 young Ivorian soldiers. Young patriots who were willing to defend the President of Ivory Coast from the onslaught of a French-backed post-modern coup d´etat. The capture an arrest of President Laurent Gbagbo was possible only after French special forces violated international law by blasting a hole into the wall which Laurent Gbagbo had erected inside the tunnel that connects the French embassy with the Presidential residence.

The sealed boxes with the ballots from the 2010 elections are kept at the United Nations. So far U.N. Secretary General Ban Kyi-moon has failed to order an independent re-count of the ballots. The fact that the United Nations has so far failed to re-count the ballots to determine the legitimacy of either Laurent Gbagbo´s or Alessanne Outtara´s claim for the Ivorian Presidency, combined with the selective and one-sided prosecution of Laurent Gbagbo at the ICC and of military officers who were loyal to him in 2010 is symptomatic for grave systemic and procedural problems at the United Nations and the International Criminal Court at The Haag. The case against Laurent Gbagbo ought to have been dismissed on the basis of selective prosecution from the very start. His prosecution at the ICC after French involvement in the aggravation of post-election violence in Ivory Coast and the arrest with the aid of French special forces is a blatant example for the abuse of the ICC as an instrument of modo-colonialist control. The most recent selectively prosecuted case is that against General Dogbo Ble in Ivory Coast. Also here western media are de-facto sentencing a political opponent of modo-colonialism before he is even heard in court.(13)

A recent analysis of the systemic and political problems with the ICC, the United Nations, the Rome Statute and the explosion of international law at its very root by Dr. Hans Köchler (14) reads as if it was written to elicit the injustice that is being perpetrated against Laurent Gbagbo and the people of Ivory Coast.

Missed Chances for African and European Economies and the Urgency of Change.

A growing number of African and European leaders are becoming impatient about the paralysis of France. African leaders are impatient because the obvious usurpation of their nations is unbearable for the African economies and their populations. European leaders are mostly impatient because France prevents a European adaptation to the last decades geopolitical changes in Africa and because the crisis of the Euro requires initiative rather than stagnation. Failure to integrate the western African economies into the economic sphere of Europe is bound to have devastating long term consequences for both Africa and Europe.

China has recognized the colossal market potential of a developing African middle class. The French and Trans-Atlantic model of usurpation and subjugation is not only criminal and unethical, it is also uncompetitive.

Recent statements made by the French political heavyweight Jacques Chiraq, who said that France does not have to be a benefactor, it must merely stop usurping Africa, are indicating a potential for change. Chiraq stated that failure to change French-African relations can have catastrophic consequences. 2012 Presidential candidate Jean Luc Mélenon stated that the CFA represents the severe mistake not to tie the western African economies to the economies of the European Union. Mélenon demanded that France abandons its veto right at the Boards of the African Central Banks.

The European Council stated that France is blocking for any project of the European Central Bank that attempts to change the nature or the bearing of the French involvement in the western African Central Banks. The French approach to managing French-African relations is not only bleeding Africa. It is increasingly bleeding both the French and European economies who are missing out on the market potential of an emerging African middle class.

Some political analysts have suggested the establishment of an African-European Peace and Reconciliation Commission that is dealing with the crimes of the past, the building of trust, the review of highly politicized cases at the International Criminal Court, such as the prosecution of Ivoryan President Laurent Gbagbo to ease a transition toward new African-European relations.

The question for this and the coming year is whether France will continue standing at the edge of the cliff and fall while dragging both western Africa and Europe into the abyss together with it, or if it dares to listen to the voices of reason from Africa and its European partners, turn its gaze away from the abyss and see that there is fertile land, right behind it.

“We want to express our recognition and gratitude to Prof. Nicolas Agbohou. The historical context of the article and references about it are inspired by his speech at the Conference on African-French Relations in Paris City Hall, on 09 October 2012. – NSNBC International.”

NB.: If you like this kind of journalism, please sign up for a free subscription for our newspaper at the bottom left of this page and if possible, donate a few coins per month by using the donate button in the right side column. Thank you for informing yourself and for your support.

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The CFA Franc: Africa’s financial anachronism



 More and more voices on the African continent, from expert economistsbusinessmen to politicians and simple citizens are questioning the CFA franc system that rules the monetary regime in francophone West Africa.

Paris-based Pan-African groups i are organizing a protest to be held on the 31 October 2015, at Chamalières, France in front of the building where the CFA franc, a visible relic of the country’s previous colonialism, is still printed to this day. Chamalières, a small town in central France, is the location where the country’s central bank Banque de France founded its printing works in 1923.

Most independent states have their own national currencies. Worldwide, only four groups of countries issue a common currency and conduct a joint monetary policy. The four monetary unions — characterized by a common central bank which issues a regional currency — are the euro zone, the Eastern Caribbean Currency Union (ECCU) and two African monetary unions: the West African Monetary Union (also known by its French acronym, L’Union monétaire ouest-africaine (UMOA) ii and the Central African Economic and Monetary Community (Communauté Économique et Monétaire des Etats de l’Afrique Centrale, CEMAC).iii

The two African monetary unions, also known as the franc zone, are made up of France and 14 African states iv:  eight of them make up UEMOA: Benin, Burkina-Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo; six others make up the CEMAC: Cameroon, Central Africa, Congo, Gabon, Equatorial Guinea and Chad. The franc area also includes the Comoros.v

The anomaly in the two African monetary unions UEMOA and CEMAC is that final fiscal and monetary decision making on the issuing of a currency used by 150 million people in 14 different countries is endorsed each year by a foreign parliament. Specifically, the French National Assembly and Senate.

A colonial heritage

By the late 1890s France formally established French West Africa, comprised of: Côte d’Ivoire, French Guinea, Niger, Burkina Faso, Senegal, Mali, and Benin (then Dahomey). In 1905 Mauritania had become a French Protectorate, but by 1920 it joined French West Africa as a colony.

Before territorial currencies were born in the 19th century, monetary systems were organized quite differently. Foreign currencies circulated side by side with domestically produced currencies. “Just before the American civil war as many as 10,000 different types of paper notes circulated in that country and merchants were forced to consult frequent newsletters that detailed the exchange rates between them”, writes Professor of International Political Economy Eric Helleiner in his book The Making of National Money Territorial Currencies in Historical Perspective. “In China, a heterogeneous monetary order lasted till the 1930s”, to name but a few historical examples.

Before the introduction of the French franc as the accepted legal tender, local currencies in French Polynesia, then Oceania, (such as shells, feathers, animal teeth) and in New Caledonia (such as dyed fiber skirts, fox hair, jade pearl necklaces, yams, axes) were used side by side with the French franc, the dollar and the Chilean and Peruvian

The history of money also maps the relationship between political and monetary systems. During colonialism the monetary system functioned within the framework of an empire. During the French colonial empire, a single currency was circulated on the entire territory it controlled on a fixed parity basis. Colonial authorities also created new low-denomination money that was integrated with the new official system and they made concerted efforts to remove from circulation those forms of money, such as foreign currencies and pre-colonial local currencies, that did not conform to the new homogeneous monetary order,” wrote Professor Helleiner. vii

Resistance to colonial currencies was not uncommon: “for about four decades following military defeat — a condition starting with occupation in 1897 and routinized around 1903 with incorporation into French West Africa — the population of the west Volta (now in Burkina Faso) successfully flouted the colonial policy of replacing the local money (the cowry) with the franc,viii writes Mahir Saul in Money in Colonial Transition: Cowries and Francs in West Africa. A French imperial decree in January 1907 eventually prohibited local treasuries from accepting cowries to enforce the transition to colonial coins.

Historically, and as part of the French colonial empire, all French colonies in Sub-Saharan Africa were part of the broad franc zone. The broad franc zone at some point in time included countries from various parts of the world with various forms of French currency used in the French colonial empire at one time or another one including: franc CFP (Franc des Colonies Françaises du Pacifique) in French pacific colonies (French Polynesia, New Caledonia, Wallis and Futuna islands), franc CFA (Franc des Colonies Françaises d’ Afrique) for French African colonies; franc Comorien (Franc of the Comoros colony); franc Marocain for Morocco, franc Tunisien for Tunisia, franc Algerien for Algeria and the franc and other forms of France controlled currency in Indochina (Cambodian franc, and “piastre” in Vietnam and Laos).

With their accession to independence, and like in the British colonial empire where many countries dropped the sterling zone and centralization of foreign reserves in London, many countries abandoned the broad franc zone arrangement with their accession to independence: Algeria (1963), Morocco (1959), Tunisia (1958), Mauritania (1973), Madagascar (1972), Guinea Conakry (1958), Indochina (1954), Mali (1962, but reintegrated in 1984).

Originally established in 1939, just before World War II, the CFA franc was first printed on December 26, 1945, when France ratified the Bretton Woods agreements and made its first statement parity to the International Monetary Fund (IMF). CFA initially stood for  “Franc of the French colonies in Africa” and the French monetary agency, the Central Cashier of France for Overseas Territories, was responsible for issuing currency in the French colonies between 1941 and 1959.

Today’s franc zone is an extension of the monetary authority that governed these former French colonies prior to independence. In the late l950s, the two currency unions were set up, and the newly independent Francophone countries of Africa were given the option of joining. All but Guinea, Madagascar and Mauritania joined the franc zone.

Through the agreement to join the French community, two regional central banks were created in 1962 which dealt with the CFA franc: the Central Bank of West African States (Banque Centrale des États de l’ Afrique de l’Ouest, BCEAO) and the Bank of Central Africa and Cameroon (Banque Centrale des Etats de l’ Afrique Centrale, BCEAC) — both were controlled by the French Minister of Finance.

Rules set up at the time to govern the monetary system are still intact today: governments borrowing from the central bank could not exceed 20% of the previous year’s tax receipts; at the time 100% of foreign reserves were centralized in the French treasury; the exchange rate was fixed at 50 CFA to 1 French franc and has remained constant undergoing only two devaluations in 70 years, thus making nominal devaluation impossible as a monetary policy choice for economic governance.

However from the end of World War II until the adoption of the euro, France devalued its own franc 14 times in order to bolster competiveness and exports, with the CFA franc devalued along with it each time. “For the CFA countries lacking well-developed industrial production and intra-community trade, devaluation brought them higher import prices, inflation, and rising unemployment” says Sanou Mbaye, Senegalese economist and former senior official at the African Development Bank.

Institutional dependency

France continues to exert influence on the definition of monetary policy in the countries concerned, notably through its representation in the boards of the respective regional central banks, which has veto power over key decision-making. France can also exert peer pressure at the annual meetings of the finance ministers.

Monetary cooperation today between France and African countries in the franc zone is governed by four fundamental principles: the holding of the countries foreign reserves, a convertibility guarantee by the French, a fixed peg to the euro and an unlimited transfer.

Seventy years after its creation the franc zone has not increased trade within the region nor with France. Interregional trade is extremely low around 20% when compared to the European Union, which stands at 60%.  Furthermore today 80% of France’s exports in Sub Saharan Africa are directed outside the Franc zone countries (such as Nigeria, Angola and South Africa) and 20% only with the franc zone, thus the monetary regime no longer accompanies actual trading patterns ix.

Another anomaly is that monetary and “real” economic policy decision making are split into two different organizations: in the case of the West African Union the 1962 UMOA treaty governs common monetary policies and the 1994 UEMOA treaty governs the common economic policy goals.

In 2010 the BECEAO, the region’s central bank, updated the 1962 UMOA treaty, which stipulates the bank’s independence from all member countries. The region’s monetary policies prior to this treaty where outlined by the Council of Ministers, now they are outlined through the newly established West African States Central Bank (BCEAOMonetary Policy Committee. It has placed price stability as its only objective; furthermore it states that the bank cannot come to the help of member countries facing need.

Within the BECEAO’s Monetary Policy Committee a French representative sits with decision-making powers. However, the UEMOA representatives from the eight member countries in the region only sit in an “observer capacity”, economist Kako Nubukpo, former Head of Economic Analysis and Research Division at UEMOA said. x This decision-making architecture dangerously separates the real economy from monetary policy choices, thus not necessarily reflecting the regions needs.

The holding of the countries foreign reserves

So this day members’ foreign-exchange reserves are pooled; each central bank keeps 50% of its foreign reserves with the French treasury. The ratio was 100% until 1973 and 65% until the 2005 agreement lowered it to 50%. An extra 20% is kept to cover financial liabilities. In recent years, these accounts held by the French treasury have been in surplus despite the dire need for liquidity on the continent to spur economic development.

This has fostered a liquidity crunch in the franc zone and a lack of investment opportunities as reserves are hoarded at the French treasury. Furthermore, the unlimited transfer has also facilitated capital flight and illicit transfers.

Even though the BEAC and the BECEAO have an overdraft facility with the French treasury, the drawdowns on those overdraft facilities are subject to the consent of the French treasury. The final say is that of the French treasury, which has invested the foreign reserves of the African countries in its own name on the Paris Bourse.

In reality the regions’ African economies keep to this day up to 100% (98% for CEMAC countries and 90% for UEMOA) in the French treasury.

Furthermore, growth is not accounted for in the regional central banks objectives. To ensure monetary discipline, foreign reserves must equal at least 20% of the central banks’ short-term deposits.  The fact that the CFA central banks impose this cap on credit -20% of that country’s public revenue in the preceding year-is a further limitation on liquidity availability. The tight lending constraints imposed on government and private sector borrowings is also reflected in the ratio: credit accorded to businesses represents 300% of gross domestic product (GDP) in the United States, 150% of GDP in South Africa and 95% in France whereas its as low as 23% of GDP in the franc zone (sometimes falling under 20%).  This is an indicator of very little liquidity circulating and difficult access to credit in francophone West Africa when compared to other areas.

A recent 2014 Bloomberg Business news release reads: “A hoard of cash sits in the Bank of France: $20 billion in African money held in trust by the French government and earning just 0.75% interest. Now economists and politicians from 14 Central and West African countries say they want their funds returned and an arrangement dating back to the days of France’s colonial empire ended.”

The CFA franc zone is organized to restrict credit expansion to net export revenue by suppressing the mechanism that would ‘expand’ credit endogenously through either credit advanced against assets, in particular financial assets, or fiscal stimulus.

Economist Jan Podorowski asks the critical question if modifications in the operating mechanism of the Franc zone, allowing for greater credit flexibility, could support economic development in a more effective way xi.

Unlimited convertibility guarantee by the French

France states in the monetary agreements, that in exchange for holding 50% of the respective countries’ foreign reserves, it guarantees the CFA Franc convertibility, where by the two CFA Franc currencies are fully convertible to the euro or any other currency.

Because the French treasury is itself subject to EU Maastricht stability pact as well as the most recent EU budget stability pact signed on March 1, 2012 by all 27 EU countries except UK and Czech Republic restricting budget deficit of the French Treasury, the presumed unlimited access to foreign exchange is clearly a ridiculous myth, Salomon Samen xii, economist and World Bank Institute Trade Group member said.

In addition, in recent three decades with successive and repetitive balance of payment crisis in many African countries, recourse to resources of the international community (IMF, WB) was the standard practice and has played the central role in meeting expected financing resources required. France has not acted as the lender of last resort role in this monetary arrangement.

Furthermore the European Central Bank (ECB) or the European System of Central Banks are not obliged to support the convertibility and/or parity of the CFA (or Comorian franc.) Yet African countries are now compelled to apply macro-economic policies similar to those applied in the euro area.

Interregional trade is also limited as within the two sub zones the CFA franc of each sub-zone is convertible with the euro but not directly with each other’s. The CFA franc here acts as a bias against African economic integration.

A fixed peg to the euro

In todays’ world, there is continuum flexibility between the free float and the rigid peg. Depending on the typology used, there are between eight and 15 different types of exchange rate regimes based on the IMF official rankings. The CFA franc, which has maintained a fixed parity with the French Franc since independence, is one of the longest experiences with a fixed exchange rate of any group of developing countries. Some authors argue that the CFA franc zone member countries have lower economic growth due to the rigidity of their exchange rate regime, which is linked to the Euro zone economy and its focus on low inflation and stability, rather than the more immediate needs of an African economy.

A strong currency acts in the economy as a tax on exportations and a subvention on imports: this factor has reduced the capacity in capturing world markets for primary resources exports”, explains Nubukpo at a recent conference held on 17 September 2015 on the CFA franc zone at the French senate. The dramatic failure of the cotton industry in West Africa is one example of a market that could not compete with lower prices from Asia. “The CFA Franc has not been at the service of growth and development, our economies by only exporting primary resources, also export possible jobs which could be created on the continent”, Nubukpo underlines. xiii

Harvard economist Dani Rodrik comparing Asian growth to African growth writes: On line In Asia, growth is typically engineered by increasing the profitability in manufacturing and other tradables. But in Africa the typical growth spurt is preceded by aid inflows and other transfers, which appreciate the exchange rate, and render future growth less sustainable. This is the so-called Dutch disease.” xiv

European control

African countries are now compelled to apply macro-economic policies similar to those applied in the euro area whose focus is on inflation control and stabilization, rather than economic growth and employment.

With France’s membership to the euro zone on 1 January 1999, the parity remained the same, adjusted automatically, making one euro worth 6.55957 FF francs – equivalent to 655.957 FCFA.

Before the replacement of the franc by the euro, the change in parity with the CFA franc was the outcome of consensus among all signatory countries to the exchange rate agreements between France and its African counterparts. Since the replacement of the French franc by the euro, France may negotiate and conclude modifications to the agreements. However, the Commission, the European Central Bank and the European Economic and Financial Committee must be informed in advance of any such changes.

Towards an African currency

Seemingly, those who have tried to move away from the CFA franc framework have been severely punished by their former colonizer France. Guinea’s former president Sékou Touré refused to join the Union in 1958, as did the Republic of Togo’ first president Sylvanus Olympio, who on 13 January 1963 was assassinated just three days after he started printing his country’s own currency. More recently in April 2011, Ivory Coast president Laurent Gbagbo, who had been pushing for a sub-regional monetary unification, was fiercely toppled by a French-UN coup d’état.xv

Proposals are being developed for several regional African monetary union projects xvi as well as one spurred by the African Union which intends to create a African Central Bank in Nigeria and an African Monetary Fund in Cameroon as part of the creation of a common currency for the whole continent by 2021.

Money’s functions are not just economic, but also political (an instrument of power), social (facilitating various social relationships) and cultural (transmitting or reflecting cultural values). Mbaye, speaks of an urgent need to decolonize the franc zone: “France has always drawn on its African reserves, especially during economic downturns. It did so in the 1930’s, when the franc zone helped France to survive the Great Depression, and again during World War II, when the zone bankrolled General Charles de Gaulle’s resistance to the German occupation. Another devaluation of the CFA franc today might deflate France’s debts to the franc zone and boost its African-based export industries, but it would worsen the franc-zone countries’ miseries”xvii. The scope of the demonstration to be held on the 31 of October 2015 is focused on unmasking these faulty mechanisms of the CFA franc.

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