The Bank of Senegal: Ancestor to the FCFA – producing Bank

Monnaie_Bank of Senegal 1872
5 Francs from La Banque du Senegal – 1872

My people, have you ever heard about The Bank of Senegal? The grandparent to the current FCFA producing banks (BCEAO, BEAC)? The bank which was created to cover the losses of slaveowners when slavery was abolished? The owner of slaves were compensated, but not the slaves who had been over-exploited. In essence, after the abolition of slavery, in French colonies, a new system of exploitation was put in place through the banking system (The 11 Components of the French Colonial Tax in Africa).

Monnaie_Bank of Senegal 1917
2 Francs BAO 1917

Well, the Bank of Senegal was created by Napoleon III by imperial decree on 23 December 1853. First established in Saint-Louis in Senegal. In 1867, a branch was opened in Gorée (then transferred to Dakar in 1884), then another branch in Rufisque. It was started as a public limited company with a capital of 230,000 F, approved by the Emperor established by reference to the law of April 30, 1849, to settle the problem of compensation granted to slaveholders following the abolition of slavery (Décret d’abolition de l’esclavage du 27 avril 1848).

Monnaie_Bank of Senegal 1938
25 Francs BAO – 1938

The Bank of Senegal was created to finance the campaigns of the traders in the purchase of tropical products and the sale of manufactured products. The distribution of capital in this new bank depended on the number of slaves owned or sold. The owner of slaves were compensated, but not the slaves who had been over-exploited.  This Private bank had the power to issue bearer, banknotes. In 1901, the bank evolved and became the Bank of West Africa whose shareholders were the Bordeaux houses (60%) (The Maurel house, Teisseire and Beynis), the CNEP (20%), the Marseillais (20%) (Charles Bohn).

FCFA_Dakar_BAO_1904
B.A.O. Building in Dakar, Senegal, 1904

In 1901, the Bank of Senegal became La Banque de l’Afrique Occidentale (Bank of West Africa), B.A.O. .  In 1929, its emission privilege was expanded and extended to French Equatorial Africa, Cameroon and Togo. The system put in place would help build multinational plantations for international market. As you see, there were no opportunity to access finance for local entrepreneurs. On April 14, 1959, the Central Bank of the Equatorial African States and Cameroon BEAC and the Central Bank of the West African States BCEAO were created. Although they are called Central Banks, they do not play the role of a central bank which is that of implementing monetary policies, setting official interest rate used to manage both inflation and the country’s exchange rate and controlling the nation’s entire money supply.

Let’s examine one of the most incongruous accords in humanity after the black code

Monnaie_Bank of Senegal 1941
100 Francs BAO 1941

It is the convention between France and 14, 15 African countries in the franc zone which stipulates that:

The member states agree to pool their external assets in a foreign exchange reserve fund. These reserves will be subject to a deposit with the French Treasury in a current account called “operations account.

From 1945 to 1973, these Africans exported, for example, raw materials for 100 billion dollars they deposited all the 100 billion dollars in the French treasury.

From 1973 to 2005, if they exported for $ 100 billion, these same African countries were obliged to deposit 65 billion in the French Treasury in the operations account.

Monnaie_Bank of Senegal 1994 - BEAC
2000 Francs – BEAC 1994

Paradoxically, it is France which decides when the currency can be devalued like in 1994 when the FCFA was devalued by 50%. Since September 20, 2005, the deposit amount stands at 50% for West Africa and 60% for Central Africa. This simply means that if Africans export up to 100 billion dollars or Euros, Yuan, etc. they are obliged to deposit 50 billion in the French treasury.

For Central Africa, 60% of these dollars are purely and simply recovered by the Banque de France, while only 40% go down into the treasury of the African countries

France claims that she is retaining this money to guarantee the fixed exchange rate 1 € = 655 FCFA. This is purely an economic nonsense. First we are told that the rate is fixed, and then we learn that in reality it is not because of market forces that no one can control.

Monnaie_Bank of Senegal 1994 - BEAO
5000 Francs – BCEAO

As major consequences, when African countries of the Franc zone export their raw materials to France, let’s say for example 100 million euros, France does not pay a single dime. All she does is mark a plus on the country’s name in the Operation Account better known in French as the “Compte d’opération” in the French treasury. But if it is Nigeria or Ghana that export to France, De Gaulle’s country, will be obliged to take 100 million euros from the Operation Account to pay them.

All this to say, that we, Africans, need to break these chains of economic slavery that have been on our necks for the past 167 years. We need to free ourselves, and not expect France to free us. As Thomas Sankara said in his 1984 speech at the UN, “the slave who is not capable of assuming his rebellion does not deserve that we feel sorry for him. This slave will respond only to his misfortune if he is deluding himself about the suspect condescension of a master who claims to free him. Only struggle liberates [«… l’esclave qui n’est pas capable d’assumer sa révolte ne mérite pas que l’on s’apitoie sur son sort. Cet esclave répondra seul de son malheur s’il se fait des illusions sur la condescendance suspecte d’un maître qui prétend l’affranchir. Seule la lutte libère … »]…!” AFRICA MUST UNITE and FREE ITSELF!!!

2 thoughts on “The Bank of Senegal: Ancestor to the FCFA – producing Bank

  1. Really interesting post. I have been wondering about Côte d’Ivoire lately and how the people of this country were doing economically speaking. Would you say that the historical reasons linked to this banking system and today’s economy still have an impact today? (Silly question I know)

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    1. Yes Fall, the impact of this banking system is still fully felt today especially with the currency FCFA that is used in Cote d’Ivoire, where 50% of their reserves goes to France (at one point it was 100%, then 85%, then 60%, etc), the money is printed in France, the French army still has a base in the country… so this predatory banking system still very much affects Cote d’Ivoire: 1st producer of cocoa, yet so poor. https://afrolegends.com/2017/05/01/the-11-components-of-the-french-colonial-tax-in-africa/

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