Cote d’Ivoire is by some accounts one of Africa’s best performing economies, with a reported GDP of 7.4% in 2018. It seems to do well in foreign direct investment, with total FDI stock of $10.2 billion, representing 23.8% of the country’s GDP . Above all, President Ouattara claims to have resolved the problems associated with the bloody years of civil conflict, particularly between 2004 and 2011, despite a jittery local population who will head quickly behind closed doors at the sound of gunfire in the streets, and have had to do so twice since 2017.
But the government does have one very obvious and curious monetary problem. For some reason, Cote d’Ivoire has precious little small change. This annoys and handicaps everyone. Conflicts in the streets between shopkeepers, bar owners, taxi drivers, and their customers are legion. I noticed this as soon as I came to the country in 2016, when I was unable in a bank to swap my 10,000-franc note (the highest value note in circulation, at around $16) for twenty 500-franc notes, the lowest denomination note (around 80 cents). These, together with even lower denomination coins, are universally used in the country’s markets, street stalls, and transport systems.
After shopping in Abidjan my pockets are often cluttered with unwanted packets of chewing gum, paper hankies or boiled sweets, which I have unwillingly accepted because there was no change available. Most buses and taxis insist upon exact money, often only payable in small coins, which are even known as jetons. The bakery on my corner only takes the exact money for a purchase, but invariably there are two queues that snake out of this popular bakery. One is for the newly baked bread, the other is to wait for change.
Everywhere in markets, in front of banks and supermarkets, money changers clutter the pavements. But they are not selling the CFA, the French-controlled West African franc, for dollars, euros or pounds. They are selling CFA for CFA: small change for notes. Business is lucrative in the Plateau, Abidjan’s business and financial district. I asked a money changer about his trade. “People around here have money, but only big denominations. I will sell them ninety 500-franc notes for five 10,000-franc notes, so I get 10%” (CFA 5,000 – about $8 – on the deal). I asked him how much he earns. He smiles uncontrollably but won’t say, although he did tell me that he has recently acquired three commercial properties in Abidjan.
Another informant, apparently higher up the money value chain, is less cagey. He claims that he gets his coins from employees of Ivoirian banks who exchange them with him for high denomination notes and take half the profit made by the changer on selling the coins. I cannot confirm the truth of this, but it still does not explain why there is so little small change circulating in the first place. From the supply and demand relationship, the paucity of change in the country should help the business of the money changers, who are evasive. “Only the BCEAO can answer that” says my informant, “it’s the BCEAO that controls the currency,” But there is no one at the BCEAO willing to answer questions. I am referred to a surprisingly sensitive press release, published on 9 February, 2018. “On the scarcity of small change, the BCEAO is categorical. It regularly puts small bills and coins at the disposal of banks, financial institutions, pharmacies and supermarkets.” It also notes that selling money is illegal, punishable by 1-3 years in prison and a fine of up to 3 million CFA (about $5,000).
So we know where the small change is coming from, but not where it is going. What could explain the visible evidence of scarcity? Multiple millions of coins must be missing. Ivoirians must be saving Cote d’Ivoire’s small change as if they were gold pieces. Are they in large trunks or under mattresses? Or perhaps they are spirited out of the country into black holes?
Research continues. But it looks like those organizations amassing loose change may be linked to a street market for small change, and the money changers’ activities might be affecting Cote d’Ivoire’s economic statistics by up to 10%. Meanwhile the money changers are making illicit money every which way. Except, of course, the ‘fiduciary’ way.
African Economic Outlook, 2019.
The Central Bank of West African States (Banque Centrale des États de l’Afrique de l’Ouest) is the central bank of the West African Economic and Monetary Union, with the exclusive right to issue the common currency of the eight west African countries.