Dévaluer en Afrique ?

Abstract

Devaluation in Africa ? Sylviane Guillaumont Jeanneney Although main currencies in the world are now floating, the question whether a devaluation is opportune remains a topical suject for many countries. This is especially true for the developing countries which are engaged in « structural adjustment programs » with the International Monetary Fund and the World Bank. Devaluation is one of the most disussed items of the conditionality agenda of IMF agreements, which has often led governments to interrupt négociations with the Fund. This article studies the case of a small developing country with an important and lasting balance of payments deficit whose adjustment implies a drop of the real exchange rate, i.e. a definite increare in economic comptitiveness. It gives a theoretical analysis of the conditions and consequences of a drop of real exchange rate with and without devaluation. It focuses on the crucial role of inflation expectations, on wich the efficiency of the devaluation depends. The theoretical analysis is then applied to the adjustment policies that five countries belonging to the West African Monetary Union have conducted since 1980. The originality of these policies is to have been conducted without devaluation ; indeed that these states belong to a monetary union prevents them from unilaterally changing their rate of exchange. The feature of the evolution of the effective exchange rates of UMOA countries is a higher real depreciation of these rates higher than the nominal ones, the inverse relation being more usual because of the inflationary impact of devaluation. This unusual pattern of UMOA exchange rates seems to be explained by the lack of inflation expectations. This in turn is due to the fact that the nominal depreciation of the currency has not resulted from a devaluation of CFA franc, but indirectly through the depreciation of the french franc to which CFA francs pegged. The consequence is that the monetary and fiscal policy which was needed to have the real exchange rate drop would not have been more restrictive with devaluation. According by the governments of the UMOA States are justified in their whish not to devalue. It is nevertheless impossible to anticipate what could be the right decicion in the future, because of their dependence on the international environement. The experience of UMOA countries, even if it cannot be directly transposed, shows that a steadfast pegging of a currency increases the efficiency of the control of global demand by reducing inflation expectations.