It’s a common scene in any Lomé (Togo) market, but it’s telling. A customer hands a 10,000 CFA franc note to a vendor to buy 1,650 francs worth of tomatoes. The vendor sighs, rummages through a knot in her loincloth, then disappears to beg a neighbor for change. Minutes later, she returns with crumpled 500 franc notes and two complimentary sachets of water to make up the difference. This daily ritual, which amuses some and irritates others, reveals a monetary paradox plaguing the WAEMU (West African Economic and Monetary Union) zone: a chronic shortage of small denominations.

How can a monetary union known for its stability with the CFA franc firmly pegged to the euro struggle to ensure what any modern economy should guarantee: the smooth flow of basic transactions? While inflation is under control and the currency peg reassures investors, buying bread or paying for a moto-taxi can be a logistical headache. It seems the Central Bank of West African States (BCEAO) is more focused on monitoring reserve ratios than on the circulation of 100 CFA franc coins.

This mechanical shortage has structural causes. ATMs overwhelmingly dispense 5,000 and 10,000 CFA franc notes for efficiency, while the 500, 1,000, and 2,000 franc notes, essential for small businesses, vanish into markets and urban transport systems. Vendors hoard small change as a strategic asset, knowing that without it, business grinds to a halt. Coins, meanwhile, barely circulate, considered cumbersome and too expensive to produce. The irony is that minting a 100-franc coin can sometimes cost more than its face value. As a result, the economy operates with large-denomination bills that are poorly suited to its deeply informal structure.

This scarcity is not just a logistical bottleneck; it creates real economic and social costs

This scarcity is not just a logistical bottleneck; it creates real economic and social costs. Hours are wasted every day searching for change, which translates to lost productivity for both vendors and customers. This collective waste is a drain on the economy. The shortage also fuels subtle inflation. Without exact change, prices are rounded up, making the inflation felt by households appear higher than official measurements. Worse, the lack of change has often turned simple transactions into heated disputes, with altercations sometimes escalating to violence and, in rare cases, even death.

Finally, this situation exacerbates social inequality. It's primarily low-income consumers, who rely on cash and lack easy access to digital payments, who bear the brunt of this daily "micro-cost." While more connected individuals turn to mobile money, these solutions are far from universal, and vendors often don't accept them.

In Ghana, the contrast is stark. Operators have built an ecosystem where sending 10 or 20 cedis costs so little that some vendors encourage this payment method. There, digital modernity has integrated itself into even the smallest shopping habits.

The other weak link is the digital ecosystem. While electronic payments exist in the WAEMU, they have yet to become a daily habit. Instead of focusing on education or lowering costs, governments seem more preoccupied with how to tax these services. As a result, small transactions of 300 or 500 francs often remain too expensive or impossible to conduct via mobile. In Ghana, the contrast is stark. Operators have built an ecosystem where sending 10 or 20 cedis costs so little that some vendors encourage this payment method. There, digital modernity has integrated itself into even the smallest shopping habits.

Of course, Ghana is not without its own paradoxes. With inflation reaching over 60% two years ago and currently around 13%, prices have risen so much that 1 and 2 cedi coins, once indispensable, have been marginalized, almost relegated to the status of monetary relics. Their purchasing power has become so weak that they are more useful for rounding up a taxi fare than for buying a meal. But this erosion of value has pushed Ghanaian authorities to rethink their currency structure and, more importantly, to double down on digital solutions to prevent small change from becoming a "museum of coins" with no real use.

The scarcity of small denominations isn't just a failure of monetary logistics; it shows a chain where every stakeholder, the central bank, commercial banks, governments, and vendors, is falling short. Commercial banks, by prioritizing large bills in their branches and ATMs, worsen the imbalance. Digital payments, a true solution, are not yet ingrained in habits. Instead of focusing primarily on how to tax them, governments would do well to reduce their cost of use so that even micro-transactions of a few hundred francs can be made without friction.

In the WAEMU, several initiatives for small payment apps or "tokens" have emerged, but they have not survived due to a lack of a structured ecosystem and support. The BCEAO, commercial banks, and member states must collectively rethink payment fluidity. This means mandating quotas for small bills in ATMs, organizing the collection and recirculation of coins, and making digital payments as simple and cheap as possible. The issue is not just technical; it is also social.

In short, while the CFA franc reassures Brussels, the IMF, investors, and ratings agencies, it often frustrates residents in Lomé, Abidjan, Bamako, or Cotonou. And it is perhaps in this seemingly trivial detail experienced every day by millions of citizens that the true monetary modernization of West Africa will play out. The shortage of small change in the WAEMU is not a minor detail; it reflects a mismatch between a monetary system designed for macroeconomic stability and the microeconomic realities of millions of people. Trust in a currency is not only measured by its peg to the euro or by fiscal discipline, but also by a citizen's ability to buy bread without being met with the fateful phrase, "I don't have any change." And as long as this paradox persists, it's clear that in the WAEMU, the bad money continues to drive out the good.

Fiacre E. Kakpo