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Financial Frictions and Exchange Rates in ECOWAS’s Prospective Monetary Union

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Regional Integration and Policy Challenges in Africa

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Abstract

The prospective monetary arrangements between the 13 countries of the Economic Community of the West African States (ECOWAS)1 have taken center stage. The plan to create a currency union began in 2003 with the formation of the West African Monetary Zone (WAMZ),2 which was to later merge with the West African Economic and Monetary Union (WAEMU).3 The monetary union’s launch was initially set for 2005, but the process was postponed to 2009 and has not yet been implemented. At the center of this delay is a lack of preparedness by member states to meet the convergence criteria for inflation, official reserves, and public deficit. The West African Monetary Institute was created in 2000 to monitor compliance with the convergence criteria and organize macroeconomic surveillance within the group. The poor achievement of convergence criteria has become a stumbling block to progress towards the creation of a single currency.

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Authors
  1. Lacina Balma
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Editor information

Editors and Affiliations

  1. Macroeconomic Policy Division, United Nations Economic Commission for Africa, Ethiopia

    Adam B. Elhiraika (Director) (Director)

  2. United Nations Economic Commission for Africa, Ethiopia

    Allan C. K. Mukungu (Senior Economic Affairs Officer, Special Envoy) (Senior Economic Affairs Officer, Special Envoy)

  3. Development Planning Consultant, Capacity Development Division, United Nations Economic Commission for Africa, Ethiopia

    Wanjiku Nyoike

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© 2015 Lacina Balma

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Balma, L. (2015). Financial Frictions and Exchange Rates in ECOWAS’s Prospective Monetary Union. In: Elhiraika, A.B., Mukungu, A.C.K., Nyoike, W. (eds) Regional Integration and Policy Challenges in Africa. Palgrave Macmillan, London. https://doi.org/10.1057/9781137462084_9

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