West CFA franc markets have suffered worse current account deficits than Central CFA franc markets

Plan for lengthy payment delays from local partners

To help local partners facing FOREX shortages, firms should consider offering financial support—for example, by significantly extending payment terms where possible in the short term. MNCs may consider channel transitions, such as switching to work with local partners that own subsidiaries in third countries, as this improves the chances of accessing FOREX. Additionally, firms may consider raising stock levels held domestically in CFA franc markets to ensure continuity of supply to customers during periods of acute FOREX shortages.


  • Worsening FOREX shortages have been observed in all CFA franc markets. In November 2022, West African Economic and Monetary Union (UEMOA) net external assets reached the lowest since November 2016, equivalent to a -53.0% YOY decline, which put significant pressure on the region’s FOREX reserves.
  • The shortage has affected all CFA franc markets and industries equally. FrontierView has anecdotal evidence from its MNC clients that local partners have not been able to access FOREX for up to 18 months.
  • In the absence of CFA franc member states’ ability to unilaterally devalue their currencies, the Ukrainian conflict caused an increase in the prices of imports, especially food and energy, which put significant pressure on current account balances, further degrading FOREX reserves.

Our View

The FOREX shortages are expected to persist throughout 2023 but should improve in 2024. Monetary authorities in CFA franc member states are unlikely to intervene into currency markets to alleviate FOREX shortages, because no sole member state has the capacity to take unilateral action. Although relatively similar, the FOREX shortages are expected to be shorter in duration and of lower intensity in the Central African CFA franc markets, such as Cameroon. Indeed, the healthier current account balances and strong oil and gas exports are great assets to overcome the shortages. In West African CFA franc markets, such as Côte d’Ivoire and Senegal, the current account deficit is notably more pronounced, further prolonging the shortages. Still, Côte d’Ivoire and Senegal, the powerhouses of the UEMOA are set to become significant oil and gas exporters by the end of 2023, which will contribute to a significant influx of foreign currency into these markets. Although the pressures on the CFA franc are strong, the breakup of the monetary union is unlikely considering the significant trade efficiency and opportunities it offers. Also, in West African CFA franc markets, the project to replace the CFA franc with the new “eco” currency is still underway, but it will not be introduced before 2027.

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