Towards A Monetary Union in the Economic Community of West African States (ECOWAS): Prospects and Challenges"
This study aims at highlighting the politics of international cooperation with respect tomonetary integration in West Africa. Monetary integration was envisaged in theEconomic Community of West African States (ECOWAS) when the organization wasformed in 1975. Two decades after its formation, it was realized by member statesthat limited success had been achieved as far as the objectives of the organizationwere concerned. As a result, the ECOWAS Treaty was revised and significantdecisions were made in 1993, and the call for a monetary union was reiterated.Factors which could have worked against the formation of a monetary union prior to1993 changed in favour of monetary cooperation. The adoption of the Euro in theEuropean Union and more especially by France, weakened the symbolic link of theCFA Franc zone to France, and to an extent reduced the French stigma, which hadhitherto discouraged Anglophone countries from participating in an expandedmonetary union with their Francophone counterparts. The democratic transition ofNigeria and the accession to power of a new leader who has shown commitment toregional integration, improved cooperation arrangements among ECOWAS states inworking towards the formalization of a monetary union. The transformation from theOrganization of African Unity (OAU) to the African Union (AU) and its strategy ofcreating a common African currency as well as the emergence of the New Partnershipfor Africa’s Development (NEPAD) provided extra motivations for African states toshow more commitment towards integration. Based on the above factors, severalpositive steps have been taken towards the formalization of a monetary union in thecommunity. The West African Monetary Zone (WAMZ) was realized in 2000 andmore importantly, the West African Monetary Institute (WAMI) was created andstarted operating in the same year. The Institute was created to prepare thegroundwork for the creation of the West African Central Bank. The above mentionedfactors increased the prospects of forming a monetary union in the community butseveral challenges still remain. First there is the problem of the asymmetric nature ofthe economies in the region. Secondly, political instability is a major factor thatmilitates against the formation of such a union. Domestic political instability inNigeria, which is heightened by ethnic and religious differences as well as theasymmetric nature of her economy in relation to those of other states in the region,makes it difficult for a monetary union to revolve around her. This research project is centered on Treaties, statistical analysis, theories and concepts and literature fromeconomic and financial institutions. We conclude by stating that the analysis herereflects the situation on the ground and provide lessons to member states of thecommunity, prospects for monetary integration would be further improved if memberstates work coherently to overcome such challenges.
Year of publication: |
2006-11-15
|
---|---|
Authors: | Kode, David Ebung |
Subject: | politics of international cooperation | monetary integration | West Africa | Economic Community of West African States | ECOWAS |
Saved in:
freely available
Saved in favorites
Similar items by subject
-
On the economic desirability of the West African monetary union : would one currency fit all?
Couharde, Cécile, (2022)
-
Review of the economic integration experience of ALADI, ASEAN, CACM and ECOWAS
(1991)
-
Ojo, Oladeji O., (1987)
- More ...