CFA denotes Franc de la Coopération Financière en Afrique.
Most countries do not have significant stocks of direct advances, because governments generally clear these at the end of the year through issuance of treasury bills or transfers from other government accounts. However, a few of the countries in the database have accumulated significant stocks of direct liabilities to the banking system.
Botswana and Mozambique have fairly developed markets for central bank notes.
A good measure of these shortcomings is the number of nonperforming loans (NPLs). Mehran and others (1998) found that the ratio of NPLs to total loans averaged 16 percent in 16 non-CFA countries. The ratio was significantly higher for HIPCs than for non-HIPCs, with almost one-fourth of total loans recorded as NPLs in the former group.
A more common approach is to look at the uncovered interest rate parity. However, using foreign market interest rates for African countries may overstate the cost, since most of their borrowing is on highly concessional terms with interest rates well below market rates. The implicit interest rate calculates the average interest rate, which takes into account (ex post) exchange rate depreciation.