Is West Africa Monetary Zone a Common Currency Area?

  • Tunde A. Bakare-Aremu Department of Economics, National Open University of Nigeria, Abuja
Keywords: West Africa Monetary Zone, Growth Convergence, Neoclassical Convergence Theory, Panel Data Analysis


The integrating units of West Africa Monetary Zone are expected to satisfy nine (9) macroeconomic convergence criteria to kick start the monetary union. This paper examines the possibility of attaining economic growth convergence in the zoneover time, because the success of the former rested on the latter. By growth convergence, it implies that the six economies that made up the zone are presumed to be alike in terms of consumer preferences, techniques of production adopted and economic policies thrust. The result shows an evidence of growth convergence within WAMZ, which is an indication that all member states of WAMZ has common features, this further indicates that, there would be a sparkling light at the end of WAMZ tunnel as regards satisfaction of the nine prerequisite convergence criteria. However, the speed of convergence and half-life are 1.5% and 35years respectively, meaning that much is still expected to be done in term of policy development and regulation to enable the much awaited monetary union. In the light of this, this study recommends that the West Africa Monetary Zone Convergence Council in consultation with the ECOWAS Convergence Council should coordinate both fiscal and monetary policies within the zone. This to a large extent, would hopefully, bring about uniformity in policy measures and implementation and, thereby, foster collaborative effort among the member state to achieve their common goal.


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