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There is no doubt that economic integration in the sub-region would be beneficial to member countries. However, the conditions precedent suggest the need to consider other factors outside the convergence criteria for the West African Monetary Zone (WAMZ) region and the link between the Franco-phone countries with France. Using stylized facts and preliminary panel results, there are still unsettled important issues as the region moves towards economic integration. These issues include but not limited to political will, huge infrastructure deficit and fiscal imperatives. 1

The study analyses the contribution of government expenditure to the economic growth process in Nigeria over the period 1960-1992. The results indicate that public expenditures on transport, communication and agriculture crowd-in private investment, while public spending on manufacturing and construction crowd-out private investment. Also, expenditures on education and health have a positive influence on private sector investment. Government must continue to perceive the creation of an enabling environment, at the least, as its own contribution to the economic growth process.

Unlike in Asia and Europe, it is not clear what the pattern and impact of financial integration have been in Africa. This paper addresses three main issues: the progress and experience towards financial integration in Africa, the degree and timing of the integration process in selected African stock markets, and the effect of financial integration on economic activity. First, using time-varying parameters from a state-space model, we assess the degree and timing of financial integration in Africa and find results that indicate contemporary patterns toward increasing financial globalisation relative to regionalization. Second, using carefully specified parametric and nonparametric regression analyses, we find that higher levels of financial integration is associated with higher levels of growth and investment, but not necessarily total factor productivity. The relationships become even clearer when we zoom in on the nonparametric iso-growth surface plots, which show that there is a threshold level of financial development that is consistent with growth in a financially segmented economy. Finally, some policy implications are gleaned from the results and the experiences in Asia and Europe. Rights and Permissions All rights reserved. The text and data in this publication may be reproduced as long as the source is cited. Reproduction for commercial purposes is forbidden. The WPS disseminates the findings of work in progress, preliminary research results, and development experience and lessons, to encourage the exchange of ideas and innovative thinking among researchers, development practitioners, policy makers, and donors. The findings, interpretations, and conclusions expressed in the Bank's WPS are entirely those of the author(s) and do not necessarily represent the view of the African Development Bank Group, its Board of Directors, or the countries they represent.