Regional Integration in West Africa

Is There a Role for a Single Currency?

Eswar Prasad, Vera Songwe

• Publisher: Brookings Institution Press
• Year: 2021
• Edition: 1
• eBook ISBN:
  9780815742821
• Topic: Economics
• Subtopic: Banks & Banking
• Index: Economics

Assessing the potential benefits and risks of a currency union
Leaders of the fifteen-member Economic Community of West African States (ECOWAS) have set a goal of achieving a monetary and currency union by late 2020. Although some progress has been made toward achieving this ambitious goal, major challenges remain if the region is to realize the necessary macroeconomic convergence and establish the required institutional framework in a relatively short period of time.
The proposed union offers many potential benefits, especially for countries with historically high inflation rates and weak central banks. But, as implementation of the euro over the past two decades has shown, folding multiple currencies, representing disparate economies, into a common union comes with significant costs, along with operational challenges and transitional risks. All these potential negatives must be considered carefully by ECOWAS leaders seeking to meet a self-imposed deadline.
This book, by two leading experts on economics and Africa, makes a significant analytical contribution to the debates now under way about how ECOWAS could achieve and manage its currency union, and the ramifications for the African continent.

Table of contents

• Front Cover
• Title Page
• Copyright Information
• Table of Contents
• Acknowledgments
• Introduction and Overview
• Basic Analytical Considerations
• Integration through Trade
• Macroeconomic and Structural Convergence
• Exchange Rate and Monetary Policy Regimes
• Illustrative Monetary Policy Rules
• Institutional Framework, Policy Coordination
• The Path Forward
• Appendix A: Comparing and Contrasting Asia's and Europe's Approaches to Economic Integration
• Appendix B: Macroeconomic Convergence Criteria for Existing Monetary/Currency Unions
• Appendix C: General Equilibrium Analysis of Alternative Exchange Rate and Monetary Policy Regimes
• Appendix D: Details on Construction of Data for Analytical Exercises
• Notes
• Bibliography
• Index
• Back Cover