Using a method of calculating real exchange rate (RER) misalignment which explicitly incorporates terms of trade shocks and the distinction between tradable and non tradable goods, this paper estimates RER overvaluation in 12 countries of the CFA franc zone before and after the 1994 devaluation of the CFA franc. The results show that prior to the devaluation, the RER was about 30% overvalued on average with sharp differences across the 12 countries. The larger oil producers (Cameroon and Gabon) were the most overvalued, while some of the smaller, landlocked countries (Chad and Burkina Faso) were much less so. The estimates appear to be robust to the choice of base year and the two elasticities of the model. One year after the devaluation, the RER was undervalued in a majority of countries, although the variation across countries remains, with Cameroon and Gabon still substantially overvalued. Copyright 1997 by Oxford University Press.