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Monday, 21 January, 2002, 17:31 GMT
Senegal adjusts to the euro
Money changer Ndiayel Ba
The euro should be as easy to use as the CFA franc
By Chris Simpson in Dakar

Three weeks since it was officially launched, the euro is already a fact of business life in Senegal.


It's got to be good for business

Money changer Ndiayel Ba

In common with 13 other countries in West and Central Africa, Senegal uses the CFA franc as its main currency.

Its convertibility has traditionally been guaranteed by France, the old colonial power, and after a devaluation in 1994, an exchange rate of CFA100 to one French franc was established.

In the Senegalese capital, Dakar, changing French money has never been a problem and it has been common for foreigners and Senegalese alike to use French money in their daily business dealings.

But with the French franc on its way out, the euro is quickly establishing itself, not least in Dakar's busy Sandaga market.

Exchange rate headache

"I've got no problem with this new money," said Pape Ndiaye, who runs a small clothes boutique.

Music trader Babacar Sene
The euro is now an everyday reality

"The notes are small, thin, easy to manage. The only headache is the exchange rate. Why couldn't they have come up with a round number?"

The official exchange rate has the euro pegged at CFA655.957. Not surprisingly, Pape Ndiaye and other traders have gone instead for a rate of CFA650 to one euro.

Money changer Ndiayel Ba has no such problems.

He runs a small foreign exchange bureau in the Plateau district and is used to dealing in points and percentages. There are posters and leaflets explaining the euro to customers.

Ndiayel Ba points to a blackboard behind him.

"All these currencies, the Italian lira, the peseta, the Belgian franc, they are all listed here, but my life will be so much easier when they've gone. The euro makes everything a lot more simple," he said.

"It's got to be good for business."

Mixed reception

Issa Ndiaye, the area manager for Coca Cola in West Africa, shares Ndiayel Ba's enthusiasm for the euro's easy convertibility.

Exchange rates
Most of these currencies will disappear

"For our own businessmen working in Europe there will now be much less of this changing currencies every time you cross a border," he said.

"It will be much easier for our exporters to get standardised payments, without all the usual variations. And we can get this money right here in Dakar."

But Issa Ndiaye is disappointed at the business and banking community's lack of preparation in Senegal.

"Many of the banks here didn't get enough euros in stock. There was a lack of preparation," he said.

"Just before the euro was launched, the Senegalese Chamber of Commerce held a seminar with the French embassy, explaining all the implications. But that is the sort of thing which should have happened months ago."

Misunderstandings

Ndiaye warns of a certain euro "psychosis", people fearing the worst because they have not received the right information.

Clothes trader Papa Ndiaye
This trader has 'no problems' with the euro

Sandaga music trader Babacar Sene agrees.

"Sure there has been a publicity campaign, but it hasn't reached everybody. For us, who are used to dealing with money, we understand it. But I'd say there are 60% of the Senegalese who don't," he complained.

Clothes-seller El Haji Malick Fall is implacably opposed to the euro, denouncing it as a French plot to impoverish Africa.

"The euro is there to help Europeans trade, not to help Africans," Malick Fall argues. "Why is our own currency so weak? Why do the French keep it so low?"

Issa Ndiaye warns against overstating the euro's influence.

"Senegal's economic performance is not about outside currencies, it's about improving our own products, becoming more competitive. It's down to people here, not the euro."

See also:

18 Jan 02 | Business
EU predicts eurozone rebound
14 Dec 01 | Business
Africa's economy stumbles
23 Oct 01 | Africa
Leaders pledge action on economy
08 Nov 01 | Business
ECB takes bold action
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