Editorial: Implications for FCFA countries as French economy nosedives.

Currently, it is ranked after the United States of America, China, Germany, Japan, India and the United Kingdom, in seventh position. Others that follow are Italy, France and Canada.

France's economic situation, according to the IMF, will cause its share of global Gross Domestic Product, GDP, in Purchasing Power Parity (PPP) terms, to drop to 1.98% in 2029, compared to 2.2% recorded by IMF analysts last year.

IMF’s latest projections indicate that France’s budget deficit will remain above 4% until 2029, with public debt expected to exceed 115% of Gross Domestic Product (GDP).

The European Commission previously signaled potential conflicts with EU fiscal rules in its response to France’s 2024 budget plan, stressing that the current outlook poses the risk of a negative adjustment by global rating agencies.

The shrink in the French economy, as economists have said, is however going to have a negative impact on countries like Cameroon, which continue to use the FCFA; as soaring inflation has already sparked a high cost of living, with prices of basic commodities shooting through the roof.

The French government of Emmanuel Macron is however not indifferent to the bad news.

According to international news agency, Reuters, it is taking tough austerity measures to cushion the fall. 

French Finance Minister, Bruno Le Maire, said the government had lowered its forecast for 2024 GDP growth to 1% from 1.4%.

In an interview with French television TF1, Bruno Le Maire also said that state spending would be cut by 10 billion euros across all departments and agencies.

He said there would be five billion euros in operating expenses cuts for all ministries and another five billion in public policies, notably in public aid for development and on residential building renovation subsidies.

He said they will also shave off from the budgets of state operators, such as export agency, Business France, and the Agence Nationale de la Cohésion des Territoires, for regional government policies.

Bruno Le Maire also said the government would make sure that France remains on track to respect its target of reducing the 2024 state deficit to 4.4% of GDP.

"We are keeping the option of implementing a supplementary budget in the summer, depending on economic circumstances and the political situation," he said.

He explained that France aims to gradually cut the fiscal shortfall in coming years until it falls below an EU ceiling of 3% in 2027.

The minister attributed the downgrading of the French economy to external forces such as the wars in Ukraine, Gaza and low trade with Germany.   

But independent economic analysts say the change in governments in Senegal, Mali, Burkina Faso and Niger, with promises to shove the FCFA, has significantly contributed to put the French economy on a downgrading scale.

It does not come as a surprise, given that former French President, François Mitterrand, once warned that France would not have any position in the 21st century history, unless it maintains its control over African former colonies. 

President François Hollande asserted in 2013 that France would be more active in shaping Africa’s destiny.

While President Jacques Chirac later re-echoed, saying “without Africa, France will slide down into the rank of a third [world] power”. 

In recent years, several African political leaders, intellectuals and civil society activists, have come to a common conclusion, clearly asserting that French domination over many aspects in Francophone Africa would aggravate the situation in the continent states and hinder development.

That pressure for African Franc zone countries to end French exploitation, is also significantly contributing to the exit of France from the world's top 10 economies.

But it is also bad news for franc zone countries, as Paris may not continue to guarantee the fixed parity of the franc to the Euro.

Paris' tumbling economic situation should therefore be a wakeup alarm for Franc zone countries to ponder over creating their own currencies so as not to be caught napping should that guarantee be rescinded.