Abstract
In this chapter, I estimate the dynamic effects of the sharing of the CFA franc on bilateral exports of member countries of the African Franc Zone (AFZ), distinguishing the results according to its two monetary unions, namely the Central African Economic and Monetary Community (CAEMC) and West African Economic and Monetary Union (WAEMU). While the overall and average effects are well identified in the recent literature, no study has focused on the dynamic effects of monetary integration in Africa. Using data from the World Bank, UNCTAD, and CEPII, I adopt a gravity specification estimated by ordinary least squares (OLS) and the Poisson pseudo-maximum likelihood (PPML) estimator. Our analysis leads to the following results: (i) in CAEMC, the dynamic effects of the CFA franc on bilateral trade of its member countries are delayed, as they are observed from 2010 onward; (ii) in WAEMU, the CFA franc has permanent dynamic effects throughout the study period; and (iii) these results, robust to the use of the PPML, are partially explained by the detour of trade caused by the fact that most of the partner countries belong to other regional groupings. All of these results call for a deep analysis of the future of the AFZ, which requires relevant reforms to ensure its viability and optimality.