The parity between the euro and the dollar can affect

For the first time in almost 20 years, the euro reached parity with the US dollar on Tuesday, July 12. If the weakness of the euro has consequences for inflation and the purchasing power of European households, it may well have consequences for the African continent as well. This is especially the case for states whose currency is the CFA franc, as it is indexed to the euro. States may then find it more difficult to repay their debt and pay for imports.

African commodity exporters can win this monetary parityaccording to Yves Ekoué Amaïzo:

“All these which exports, of course, if prices remain stable, will be in a favorable position as they will be able to export more in quantity, not necessarily in monetary value, explains the Togolese economist, head of Think Tank Afrocentricity. And vice versa, those who import will simply get these import prices more expensive. And so the population will see that most of these prices, unfortunately for everything that is daily for them, are likely to skyrocket.

Another expected consequence, the debt of the states is likely to increase, he continues:

“There is a whole system called debt service. We replace some on an ongoing basis. And depending on your capacity, ie your governance, you may or may not be able to honor this debt service. Debt service will simply and mechanically likely increase. And that essentially means to turn to donors, in particular the International Monetary Fund.

But the economist sees it as an opportunity for states to improve their logistics performance and develop local sectors.

According to Togolese economist Yves Ekoué Amaïzo, even English-speaking African countries that do not have the CFA franc could be affected by the euro-dollar parity.

Also read:The CFA franc, a pretty story

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