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ISSUE 146 - VOL 2
January 15 - April 14, 2017

Dr. Bienvenu-Magloire Quenum
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Welcome to the quarterly issue of Africabiz Online /free access Synopsis & RSS Feed edition. Previous issue available at this link

The introduction to this issue is available at this link.

Time Is Ripe To Setup State Own Banks To Accelerate The Development of Africa

By Dr. Bienvenu Magloire Quenum

On January 7, 2017 manifestations, rallies and conferences were held in 14 French speaking Africa's capital cities (except in Lome, the Republic of Togo, where the authorities refuse to give clearance) that have the Franc CFA as common currency - to protest against the existence of said currency. Manifestations and conferences were also held in Paris, London, Brussels and Frankfurt. The protesters view the FCFA as a vestige of the colonial era.

Franc CFA's shortcomings and deficiencies to promote and accelerate the development of African countries, are well documented, particularly the draconian conditions imposed to African countries by France's treasury to guarantee the usage of the common currency.

These manifestations and protestation rallies are testimony that, in spite of the reticence of some African authorities to discard the common currency, thousand of African grass root activists are determined to challenge its existence, asking for its complete removal from Africa's financial and economic landscape.

Africabiz online, wrote extensively about the predatory financial system ruling the world at large, and is completely in favor of the demise of the FCFA. However it goes a step further and ponder about what should follow the demise. What do we do to make the demise of FCFA a success in accelerating the development of African countries?

- The Argumentation of those against the FCFA's demise

The main reasoning of people/African decision makers against the demise of FCFA reads as follows: African countries which are not members of the Franc CFA Monetary Zone are not performing better than the countries which are members. These non-member states who have their own national currencies had not drastically changed the economic evolution for the better. They are, most of them, still not creating riches, year in year out, to alleviate poverty and increase the standard of living of the populations

The argumentation/reasoning seems correct as stated; but leaves a sober observer unsatisfied. So, to uncover the truth, let's dig further discussing about the Central Banks system that regulates the supply of money in said countries.

- Central Banks' Operating Procedure

French speaking West African countries' CFA currency is minted and managed by the Central Bank of West Africa States - BCEAO. In Central Africa, the Central Bank of Central Africa States is in charge, BEAC.

Non CFA monetary zone's members have their respective Central Bank.

So, apparently, these several central banks, the CFA monetary zone's members one and the non-CFA zone's members do not have anything to do in common. They appear as separate corporate entities, which mint the money/currency of their respective states, that they loan to the state against payment of interests.

The interest rate the central banks charge to supply money notes to the private banks and so called development banks (mostly owned by the state) is in the range of 5%-8% - which is the reason why said banks charge interest rates above the 5%-8% bracket to their own clients. Usury rates of 15%-17% are common in West Africa and Central Africa.

Do you really think that it is possible to achieve any efficient development policy with such usury interest rates? Not at all, as private enterprises which operate under such rates are financially suffocated, not in the position to produce at competitive prices against imported goods. Most of the time they go bankrupt and their assets are seized by the banks.

- Central Banks all over the world have the same operational procedure

All central banks in the world operate under the same procedure established by the Central Bank of United Kingdom; and are linked together. They do not belong to the country for which they mint money. The shareholders are foreign private entities. They loan the minted currency/money to the country against payment of interests.

Only the central banks of the Islamic Republic of Iran, of North Korea, the Arab Republic of Syria (and the Central Bank of Libya under the leadership of Qaddafi) are independent entities, owned by the state in which they operate and paying interests to the state. Which explains why said countries, Syria, Iran, North Korea and Libya are singled out and constantly put under pressure...and destroyed.

- Honestly, do you think that it is normal for states to pay interests to an indepedent entity that mints their currency?

Thousand of sober observers in the world are dumbfounded and amazed to see that such policy could exist. How could an independent entity mint the national currency and loan it to the state against interests?

Indeed, what a central bank does in fact? It just prints the money from thin air. Yes, from thin air, because when you solicit a loan, if granted to you, the bank employee in charge just open an account in your name as a debtor on the bank's computer screen indicating the amount granted to you; and you sign a mutual understanding document stating you would be paying back the capital (the amount granted to you) and interests at an agreed rate.

So for the service of granting you the loan, the bank asks for interest rate in the range of 17%. Do you think that acceptable? It is simply said, a scam, a swindle!

By the way, speaking of financial and monetary scam, there is worse than the FCFA swindle.

Indeed, when one reads Federal Reserve, it is normal to think that it represents the central bank of the United States of America. Right? No. The Federal Reserve is not the central bank of the United States of America. It is a private corporation setup and managed by private entities, mostly European private banks, to mint the USDollar notes, loan it to the US treasury against payment of interests. That huge swindle is running since 1913 as brilliantly exposed in the Creature From Jekyll Island.

Idem for the Reserve Bank of South Africa which belongs to foreign shareholders, mostly European private banks.

- Therefore, to get rid of the FCFA alone is not enough as the Central Bank is the main culprit

Above discussion in previous paragraph demonstrate that to get rid of the currency/FCFA alone and institute a national currency ruled and managed by the state, would not assist accelerating the development process of West and Central African countries, which are members of the CFA monetary zone.

A example to above statement is the Republic of Guinea Conakry, West Africa, that, on September 28, 1958 became independent overnight when it voted No to the auto-determination referendum (to belong to the French community of nations or part from it). Overnight, Guinea Conakry was excluded from the CFA monetary zone community and found itself without money/currency. The authorities had to rush to setup a national currency to replace the FCFA, they called the new currency, the Silly - which means money in a local language.

However, the Silly was operating in a hostile environment - the Central Bank debts generator system, which does everything possible to put hurdles and all kind of obstacles to block the development process of Guinea Conakry. The country had not recovered till today, in spite of being endowed with huge natural resources, diamond, water and mineral ores of all kinds.

So, for not having changed the operational procedure of their Central Banks, countries like Ghana, Nigeria, Guinea Conakry and others failed to accelerate the development process.

Based on above remarks, one is entitled to forecast the failure of West African countries - ECOWAS' single currency, if established as planned for 2020, to accelerate the development process. If the single currency is setup without changing the rules and operating procedure of the Central Bank in charge, no improvement would occur in the development process of member states.

- Is it possible to challenge the Central Banks System?

For quite a century, thousand of activists tried to challenge the predatory financial system instituted by the central banks - to no avail The promoters of the system were on constant alert to diffuse any "rebellion", punish, one way or another those who dare, and diabolically maintain the status quo - till today.

The reigning superpower, America, does not tolerate any challenge to King Dollar.

However, nowadays, America's superpower status is heavily under pressure, since 2008 financial crisis, from other power structures - as here exposed, that established financial and economic international organizations to compete with the International Monetary Funds - IMF, and the World Bank - two tools used by America to control the rest of the world. These new power centers are, the Asean Infrastructure & Investment Bank - AIIB, and the China Interbank Payment System - CIPS. [a, b, c, d]

With the setup of both structures - AIIB and CIPS, the coercive power of America to impose its views to the rest of the world is severely eroded. Now, emerging nations have the possibility to maneuver and find financing alternatives to the IMF and the World Bank.

So, one can assert that - from now on, would remain under the dicta of the IMF and the World Bank, leaders of countries who are afraid to rock the boat, are under blackmail for a reason or another, are corrupted or prefer the status quo.

- Yes it is now possible to challenge the Central Banks System

Based on above paragraph discussion, one sees that the central bank system can now be challenged. It is possible using AIIB and CIPS to setup throughout the continent, State owned central banks, that mint money for the Nation and pay interests to the country's coffers.

These state owned central banks would be true development banks:

- To mint money for the state, manage it and pay interests to the country's treasury.
- The state to use the money to setup/establish all kinds of infrastructure, roads, bridges, dams, universities, schools, hospitals, airports. Etc. Providing credit to entrepreneurs at very low/insignificant rate, in the range of 0.5%. The beneficiary enterprises would pay taxes and fees of all sorts to the state's coffer.
- To provide credit to private entrepreneurs/handicraft makers, small businesses and artisans for the purchase of equipment, at 0.5% interest rate; and operational credit facility to the same, at 1% rate. The beneficiary would be paying back taxes and fees to the state.
- To provide credit facility to the agriculturalists/peasants at ZERO percent rate for seeds purchase; and credit facility to purchase machinery at 1% interest rate. No doubt that the agricultural production would be boosted. The beneficiary agricultural enterprises would pay back taxes and fees.
- To provide credit to consumers to build houses, purchase equipment for the house and cars. Etc. No doubt that a consumption boom would result from such a policy - and boost the manufacturing of household equipment. Etc.

- All this is simple speculation. Utopia?

Some readers may think above discussion about state's owned banks to providing loans all around at insignificant interest rate, is just utopia. They are utterly wrong as documentation exist that prove that Australia and New Zealand use that strategy to further their economic development from the end of 19th century to mid 20th.

In reality, the state owned central banks, contrary to the central bank system controlled by foreign interests, can be considered true development banks to boosting the economy.

The extraordinary development of Germany's economy between 1933 and 1937 stands as proof. German authorities under the leadership of Adolf Hitler, managed to boost the economy at such a pace that non-sympathetic international observers spoke of "Miracle" describing Germany's economic prowess.

The cause of the miracle is here extensively described, the astute usage of the public banking system. Third Reich's authorities discovered that the engine which drives the economy has nothing to do with the strength of the money, but is strongly linked to the productivity of the populations.

Money should circulate to allow the populations to produce goods and services. Therefore Third Reich's authorities distribute credit to the populations at near zero interest rate; they organized the construction of the still existing autobahn highways network; built a car for the people, the famous Volkswagen Beetle, and give salary increases to civil workers, and pensioners. The result was the miracle that wiped out unemployment from 6.000.000 jobless people to zero - in four year time.

You may also visit Ellen Brown website, to see how the state of Dakota which had adopted public banking is doing better than other states. The bank of Dakota pay interests to the state's coffers and unemployment in Dakota, is the lowest in America.

- What could be the guarantee to avoid ad infinitum money printing and hyper inflation?

African national and regional currencies based on the public banking system, in order to avoid crazy money printing, would be backed by proven natural resources reserves such as Gold, Chromium, Manganese and Iron ores, Platinum, Copper, Cobalt, Titanium and the produce of the forests of central Africa. Etc.

For instance, the Republic of Gabon alone could guarantee the regional currency of Central Africa. No need to go and deposit/pledge 50% to 60% of hard won assets to the French treasury to obtain a guarantee for the currency, and afterwards borrow same money from the French treasury to develop the countries - under drastic disbursement/withdrawal conditions - assorted with high interest rates.

Based on their proven natural resources, Nigeria, Gabon, South Africa and the Democratic Republic of the Congo could guarantee the continental currency.

- Conclusion

Discussions in this delivery show it is possible to create strong national and regional African currencies, throught the state owned central bank system operating as true development banks - to boost the economy.

The Franc CFA monetary zone could be therefore wiped out to give way to a regional currency that covers 15 African countries in West and Central Africa.

In order to achieve this, no need for sophisticated feasibility studies. Political will is the main and only needed ingredient.

Further, there are thousand of experts that have already made studies that could be used right away. Two experts do stand out of the crowd: Madame Ellen Brown from the; and the eminent Stephen Mitford Goodson, who wrote about South Africa Reserve Bank operational procedure and scam.

Not to forget humanitarian organizations - ready to assist willing countries to establish their debt free currency, that have, since one century, studied the problem of the enslavement of the people of the world by debts generated by the current existing Central Bank System.

For related delivery to the current click here.
For an important update to this delivery, posted on October 15, 2019, click foloowing link: The Future Does Not Belong to Globalists; But to Patriots.

About the management of this Blog: Dr. Bienvenu-Magloire Quenum is the principal/ managing director of Dr. Quenum & Associates, IBC; an experienced Investment & Business Planner with 30 years consulting practice in African countries; author of Africans, Stop Being Poor! and the editor in chief of Africabiz Online

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  Dr. B.M. Quenum
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