Insertion of African franc zone countries in world trade: a study on impoverishing specialization and the problem of financing the economy.

Summary The problems associated with the way African Franc Zone countries are integrated into world trade can be explained by the high concentration of exports of raw materials for which world demand is declining and imports of manufactured goods for which world demand is increasing. Most trade is conducted with a few OECD countries for historical, political and economic reasons. Despite the existence of economic and monetary integration, intra-regional trade is marginal because of homogeneous and competing production structures. The oligopsonistic nature of commodity markets, subsidies granted by industrialized countries to their farmers, stock management and strategic reserve policies, and speculation make AFZ countries "takers of a price" that, compared to that of manufactured goods, shows a deterioration in the terms of trade, which leads to low and volatile revenues. The specialization and strong extraversion of the economy of the AFZ countries are thus at the root of unsustained long-term economic growth, recurrent public deficits and the public debt crisis. Thus, improving the macroeconomic performance of ZFA countries requires a shift from a rent-based economy to a production-based economy.