CFA franc

Maybe sometimes they're running trade slow processes, sometimes they're not, but they kind of have an insecure balance payments situation with greater to lesser degrees of distress.

And then within that group, there's countries that are totally dollarized, meaning the dollar is their official currency, or they're totally euroized, So, for example, the CFA franc, the francophone colonial African currency that just remained on as the currency for dozens of countries and to this day has its quote-unquote reserves on deposit with the French treasury.

And then...

You have countries that have a lot of foreign denominated debt.

If you are thinking of settling in Lingere or just passing through, you need to understand that this is a cash town.

There are no reliable ATMs on the stretch of the N3, so I made sure to withdraw enough CFA Franks in Luga or Tauba before arriving.

I carry a thick wad of notes now, enough for market visits, fuel, and unexpected repairs.

It feels archaic compared to the tap-to-pay culture of Dakar, but here, money is physical and trust is built on the exchange.

But then in the early 2000s, the Euro surged, the currency surged.

And because the CFA franc is pegged to the Euro, the CFA surged with it.

And for reasons that had nothing whatsoever to do with Senegal, it made everything really expensive.

Overnight, rice shipped from Thailand halfway around the world became cheaper in a Dakar market than rice grown a few kilometers up the road because of this distortion in the currency exchange.

This makes you really think why was the CFA franc pegged to the euro thousands of miles away? So buyers were walking past local stalls, warehouses were filled with grain that nobody would buy and families who'd borrowed money to pour into these cooperatives to expand the rice growing capabilities of Senegal were totally ruined because of this surge in the euro.

Then in 2008, global rice prices spiked and there were riots in Dakar because by then, Senegal was now dependent on the imports from other countries because those rices were being chosen in the market by people.

People were not buying Senegalese rice and it killed the farms.

And the ones who stay hustle in the informal economy.