In Central Africa, the CFA franc (XAF) is the common currency shared by the member states of the Economic and Monetary Community of Central Africa (CEMAC). The currency has five denominations of bank notes of between 500 and 10 000 CFA francs, and six denominations of coins (of between XAF 5 to 500).
While CFA franc notes are sometimes counterfeited, the coins have suffered a stranger fate: they have been disappearing from circulation. This phenomenon, although not new, has recently resurfaced.
Since 2017, businesses and individuals in large cities like Douala and Yaoundé have reportedly complained of the scarcity of coins. This makes small purchases difficult and affects petty cash transactions.
Some reports allege that the scarcity of coins might be the result of financial speculation by individuals and groups such as petrol stations, who ‘resell’ the coins. For instance, to change a XAF 5 000 note into coins, a coin reseller would charge XAF 150; or changing XAF 10 000 into coins could cost up to XAF 1 000. A ‘coin trader’ can make up to XAF 10 000 per day, representing transactions with about 20 people.
There seems to be more to be another, transnational chapter in the story of Central Africa’s missing coins. What sounded like conspiracy theory turned into a criminal investigation in November 2018, when a Cameroonian and a Chinese national were arrested in Douala in possession of 43 bags of coins worth between XAF 2 and XAF 7 million (€ 3 050 to € 10 671). The suspects were reportedly collecting coins from gaming and slot machines, and shipping them to China. The coins are then transformed into jewellery, such as bracelets or necklaces, or converted into tokens for slot machines.
It remains unclear whether this practice is pure financial speculation, or the result of an illegal trafficking activity to China as has been alleged. Either way, it constitutes a threat to the economy. The reselling of coins could turn into a black market and drives up the price of goods generally purchased with coins.
For the Central Bank of Central Africa States (BEAC), this activity constitutes, at best, a violation of regulations against illegal money transfers.
Under the recently revised Regulation No. 02/18/CEMAC/UMAC/CM of 21 December 2018, smuggling of money is prohibited. Travellers must also declare possession of cash currencies of more than XAF 1 000 000 (€ 1 745) to customs at border points under Cameroonian law.
The practice can also be seen to constitute a financial crime. A financial crimes specialist at INTERPOL, who spoke to ENACT on the condition of anonymity while investigations on the Douala case and another case in the Far-North region of Cameroon are ongoing, explained: ‘It is a transnational organised crime, insofar as the coins were on their way to a foreign country. It is believed that a network was waiting there’.
A senior legal officer at BEAC told ENACT that ‘investigations are ongoing, and suspects are being interrogated to determine the scope of their network and their motivation. But it is a criminal activity with transnational ramifications’. This trend is therefore worth watching, as a potentially emerging form of transnational financial crime.
Agnes Ebo’o and René Oyono, ENACT Regional Organised Crime Observatory – Central Africa, ISS