Luigi Di Maio, an Italian deputy prime minister, took aim at President Emmanuel Macron of France this week, laying the blame for migration, a deeply divisive issue in Italy, on Mr. Macron.

Citing a French-backed currency known as the C.F.A. franc that is used by 14 nations in western and central Africa, Mr. Di Maio accused France of using the currency to exploit former colonies.

Mr. Di Maio, a member of the populist Five Star movement, which is skeptical of the European Union and Mr. Macron’s more internationalist views, set off the diplomatic spat with France when he said that Mr. Macron “first lectures us, then continues to finance public debt with the money with which he exploits Africa,” according to ANSA, the Italian press agency.

But the currency, its history and the issues around it have had little to do with the debate over African migration to Europe until now. So what is the C.F.A. franc and how did it come to be at the center of diplomatic discord?

The C.F.A. franc was created in 1945 by France and was pegged to the French currency of the time, the franc.

There are now two different versions of the currency: the C.F.A. franc of the West African Economic and Monetary Union, which has eight member countries, and one for the Central African Monetary and Economic Community, which has six. C.F.A. originally stood for “franc of the French Colonies of Africa.” Later, the two financial systems each renamed the currency to reflect their newfound independence.

These two unions represent 14 percent of Africa’s population and produce 12 percent of its gross domestic product, according to the International Monetary Fund. All but two of the countries are former French colonies.

Both versions of the C.F.A. franc are now pegged to the euro. In return for guaranteeing the currency, France holds 50 percent of the foreign exchange reserves of the C.F.A. franc countries in its treasury.

The 14 nations in the monetary unions participate voluntarily, with each country having decided to continue the currency after becoming independent.

The use of the C.F.A. franc has been applauded by some people as a stabilizing force, and criticized by others as a tool of neocolonialism that has left countries without control of their own currency.

President Idriss Déby of Chad called for a restructuring of the C.F.A. franc during a 2017 celebration of the country’s independence, and others have echoed his sentiment.

Ndongo Samba Sylla, a Senegalese development economist who wrote a book on the history of the currency, argues that the C.F.A. franc allows France to continue what he called its monetary imperialism in Africa. The same guarantee that stabilizes the currency has also limited growth, he said, because the value of the C.F.A. franc is fixed against the euro, rather than being determined by international markets.

“The C.F.A. franc is the last colonial currency in activity,” Mr. Sylla said, noting that it is a direct holdover of a colonial currency system.

France has a great deal of control over the currency — including a decision to devalue it in 1994 — and French officials sit on the boards of both the C.F.A. franc unions.

Mr. Sylla also pointed out that the foreign exchange reserves held by the French Treasury are being held at a lower interest rate — 0.75 percent — than France’s own inflation rate, which stands at around 1.6 percent.

“It is as if these African nations are paying French banks to hold their money,” Mr. Sylla said.

But supporters of the currency say that the C.F.A. franc has provided stability to fledgling economies, keeping inflation lower than that of other countries in the region and allowing for economic growth.

The economies of the C.F.A. franc countries have grown since reforms were implemented in 1994, according to the International Monetary Fund, particularly agricultural sectors in Ivory Coast, Cameroon and Mali.

Mr. Di Maio points specifically to the French involvement in the C.F.A. franc zone in Africa as exploiting the continent and driving migration, saying “France is one of those countries that by printing money for 14 states prevents development and contributes to the departure of refugees.”

But even among critics of the C.F.A. franc, who say that French involvement in the economy of several African nations potentially restricts growth, there is a consensus that the currency is not a prime cause of mass migration from Africa to Europe.

“I would say that there is a small grain of truth in this,” Mr. Sylla, the Senegalese economist, said. “But at the same time it’s a damaging statement because migration issues involve many other parameters.”

Mr. Sylla said Italy should also take some responsibility for Europe’s economic relationship with the African nation’s currency. Since the C.F.A. franc has been pegged to the euro since 1999, France is required to consult the European Union on major changes in the arrangement.

“Now the C.F.A. franc is under the tutelage of France and the entire European Union, including Italy,” he said.

Orignially published in NYT.

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