But at the same time, using the West African franc as the national currency will have relatively more disadvantages.
This point has been explained very comprehensively in the document before Jammeh Bongo.
For example, the fixed exchange rate mechanism of the West African franc, which is pegged to the euro, itself has hidden dangers. The most important impact is that the West African franc countries cannot use exchange rate leverage to make external adjustments to their economies.
Because it is pegged to the euro, the West African franc tends to fluctuate with the exchange rate of the European Union. Whether and when the exchange rate will be adjusted depends entirely on the latter.
In addition, France can also directly influence and even interfere in the monetary policy of the West African franc zone through its representatives stationed in the West African franc zone's monetary institutions.
For example, in 1994, France, despite strong opposition from West African franc countries, insisted on forcing them to accept the IMF's structural adjustment program, which ultimately led to the forced devaluation of the West African franc by 50%.
Thomas Sankara, the most famous president of Burkina Faso, once said:
"The CFA franc, linked to the French currency, is one of the weapons of French domination. Through this link, this monetary monopoly, the French economy and French commercial capitalists have accumulated wealth from our people. That is why Burkina Faso is working to put an end to this situation through the struggle of our people to build an independent, self-sufficient economy."
For Colo, the strength of the CFA franc limits export competitiveness and the development of local industry.
The euro is a strong currency and the CFA franc has the status of a strong currency because it is pegged to it.
A strong currency is a tax on exports because it makes them more expensive, and a subsidy on imports because it makes them cheaper.
For example, most of Colo's product exports are denominated in US dollars, and their currency, the West African franc, is pegged to the euro in terms of exchange rate - the euro has usually been stronger than the US dollar since its inception.
This makes the price more expensive for buyers who import products from Colo.
On the contrary, their import costs are relatively low, which leads to the fact that West African franc countries often import large quantities of foreign goods, which to some extent hinders the development of local industries.
In addition, the EU has been implementing a long-term tight monetary policy based on its own situation, which is seriously inconsistent with Colo's economic situation.
Since the CFA franc is pegged to the euro, the monetary policy of the CFA franc zone has to be consistent with that of the eurozone. However, the differences in the current situations between the eurozone and the CFA franc zone mean that the eurozone's monetary policy is not applicable to the CFA franc zone.
The end result is that the West African franc has greatly restricted Colo's development.
This is because the ECB's primary objective is to fight inflation and the West African central banks have to follow the same policy.
It is based on this primary goal that West African Bank and Kolo's bank have been forced to reduce credit to local companies and African countries.
The credit ratio of the West African Franc region to GDP is only 23%, while the ratio in the Eurozone exceeds 100%. Local enterprises need funds to develop, and the long-term tight monetary policy has made it more difficult for enterprises to obtain financing, which is not conducive to the development of local enterprises.
In addition, the debt crisis of the West African franc zone has been exacerbated by its inability to fully utilize its foreign exchange reserves.
Senegalese economist Dembele believes that handing over foreign exchange reserves "means that the money that should have been used to meet our country's investment needs and support our country's development has left our country."
As a result, a paradoxical situation arises: a large amount of foreign exchange reserves of African franc zone countries are kept in the French treasury and cannot be used, and the yield is extremely low. At the same time, they lack development funds and often have to turn to international financial institutions or aid and commercial loans for help. They are forced to bear higher loan interest rates and sometimes have to accept certain political and economic additional conditions.
In recent years, the debt crisis of African countries has continued to intensify, and the proportion of public debt to GDP of West African franc countries has risen sharply from 34.4% in 2014 to 48.7% in 2018. This contradiction has, to a certain extent, exacerbated the debt crisis of West African franc countries.
For example, the foreign debt of Colo has accumulated to 1.4 billion euros, which is roughly equivalent to their GDP for the whole of last year...
However, the good news is that Colo has now met the requirements of the Heavily Indebted Poor Countries Debt Relief Initiative and is currently undergoing qualification review by international organizations including the International Monetary Fund. Once passed, it will receive more than 500 million euros in debt relief.
The so-called "Heavily Indebted Poor Countries Debt Relief Initiative" refers to the "Heavily Indebted Poor Countries Debt Relief Initiative" jointly launched by the International Monetary Fund and the World Bank in the fall of 1996.
The basic goal of the HIPC program is to use the government resources saved by debt relief in the poorest countries to reduce poverty. These resources will be used to increase government payments for public services.
Kolo has qualified for debt relief, that is, it has reached the "decision point" for participating in debt relief and can obtain temporary partial debt relief from creditor countries.
On November 18, the International Monetary Fund announced in a statement that Coloane became the 34th country eligible for the Heavily Indebted Poor Countries Debt Relief Initiative.
According to World Bank statistics, in 2003 the per capita national income in Kolo was less than US$200, and more than 65% of the residents lived below the poverty line (less than US$2 a day).
By the end of 2003, Kolo's total external debt reached US$1.8 billion, and the ratio of external debt to fiscal revenue was 396%.
This time the debt relief, as required by the IMF, also includes a social reform program.
Because the national election was completed with a transparent and fair process, it received praise from most relevant international organizations including the UN, the EU and the AU, and the requirements of the International Monetary Fund have also been met.
Back to the topic of Colom's currency reform, after withdrawing from the West African franc zone, Colom will be able to get back the foreign exchange reserves they handed over to France.
The West African Central Bank's surrender of foreign exchange reserves was one of the conditions for France to provide an unlimited convertibility guarantee for its West African franc. The foreign exchange surrender ratio was initially 100%, but was reduced to 65% in 1973.
For this part of funds, France not only provides an interest rate of 0.75%, but also provides a depreciation guarantee, that is, when the euro depreciates against the International Monetary Fund's Special Drawing Rights, France will provide compensation.
Currently, Colo's foreign exchange reserves deposited in France amount to 800 million euros. Getting back this part of the funds will also help their future development.
Finally, there are currently two African franc zones, namely the West African franc zone and the Central African franc zone.
However, the two types of CFA francs cannot circulate between each other. As a result, there is very little economic exchange between the West African franc zone and the Central African franc zone, which also limits the transit transactions of the Port of Lomé as an important port in Africa.
However, although there are so many benefits to withdrawing from the West African franc zone, Jammeh Bongo still has some concerns about carrying out currency reform and introducing the national currency of Kolo.
First, in accordance with the recommendations of this document, the Kolo government will authorize the Bank of West Africa to issue currency.
And in the Colo Monetary and Financial Committee, which is responsible for the monetary-related policies of a designated country, there are a total of five seats. The Bank of West Africa will occupy two seats, the Ministry of Finance will occupy one seat, the Ministry of the Interior will occupy one seat, and the last seat will be held by the National Economic Policy Advisor.
From this setup, it can be said that the West African Group can easily take control of this committee.
Of course, Jammeh Bongo had already anticipated this result.
And he also knew that Colo's plan to withdraw from the West African franc zone and issue its own currency was unstoppable.
But in addition to this, he also needs to consider France's attitude towards this.
It should be noted that before this, attempts by Mali, Burkina Faso and Côte d'Ivoire, members of ECOWAS, to issue their own currencies all ended in failure due to obstruction by France.
The most classic example is that in the 1960s, in order to punish Guinea for withdrawing from the CFA franc, France organized sabotage activities, printed counterfeit banknotes to flood the Guinean market, and even prepared to overthrow the then Guinean President Sekou Touré.
In 1962, French Prime Minister Georges Pompidou warned African countries considering leaving the franc zone - just look at what happened to Sekou Touré.
Although the situation is different now and France should not act too recklessly, on the other hand, in the process of Cologne's debt reduction, France also needs a certain degree of support. Therefore, even if this plan needs to be carried out in the end, it still needs a strategy.
Of course, the Anglo-African Institute is not blind to this, and in their assessment, France will be dissatisfied with Cologne's withdrawal from the West African franc zone, but the possibility of any extreme action on this matter is extremely low.
They also suggested that the plan should be launched after Jammeh Godot completes his visit to Britain and obtains more support from the British government.