Policy Coordination Framework for the Proposed Monetary Union in ECOWAS

The long run stability of money demand in the proposed West African monetary union

“…The twophase initiative for monetary integration was changed to a single currency strategy in July 2014 with emphasis on: (i) the abandonment of the first stage in 2015 and (ii) a desire for the creation of the single regional currency by 2020. The extant literature on the feasibility of the potential monetary zone is mixed at best, notably, with results standing for feasibility (Diop, 2012;Ogunkola, 2005), unfeasibility (Debrun et al, 2005;Houssa, 2008;Tsangarides & Qureshi, 2006;Cham, 2009;Chuku, 2012;Alagidede et al, 2012;Dufrénot & Sugimoto, 2013;Asongu, 2013bAsongu, , 2014bAsongu, ,2014cHarvey & Cushing, 2015) and contingent feasibility (Bénassy-Quéré & Coupet, 2005;Saka et al, 2015;Bangaké, 2008;Asongu, 2014a;Ekpoh & Udoh, 2013) 3 . It is important to note that the mainstream narrative is that the proposed currency in West Africa, while not feasible in the short run, could be viable in the long-term, contingent on convergence in some fundamental macroeconomic policies.…”

“…Most accounts in the corresponding literature maintain that while it may be feasible in the long run, conditions (of convergence in and synchronisation of macroeconomic variables) do not warrant a short run thesis on feasibility. As summarised in Section 2, conclusions have been situated along the proposed WAMU's feasibility (Diop, 2012;Ogunkola, 2005); unfeasibility (Houssa, 2008;Debrun et al, 2005;Chuku, 2012;Alagidede et al, 2012;Tsangarides & Qureshi, 2006;Cham, 2009;Harvey & Cushing, 2015;Asongu, 2013bAsongu, , 2014bAsongu, , 2014cDufrénot & Sugimoto, 2013;Diop et al, 2018) and conditional feasibility (Ekpoh & Udoh, 2013;Saka et al, 2015;Asongu, 2014a;Bénassy-Quéré & Coupet, 2005;Bangaké, 2008)…”

Real exchange rate and asymmetric shocks in the West African Monetary Zone (WAMZ)

“…States (ECOWAS). The intention is that WAMZ and WAEMU will be merged to form a single monetary zone in West Africa by 2020 to enable members to exploit both institutional and economic benefits (Debrun et al 2005;Fielding and Shields 2005;Masson and Pattillo 2005;Masson 2008;Couharde et al 2013;Ekpo and Udoh 2014).…”

A Literature Survey on Proposed African Monetary Unions

“…As summarised in Table , we refer to a chronological list of empirical studies that have focused on assessing the proposed WAMZ by author, periodicity, sampled countries, methodology, feasibility and justifications/recommendations. In most studies within this strand of the literature, results are mixed with conclusions on viability (Ogunkola, ; Diop, ), impracticality (Debrun et al ., ; Tsangarides and Qureshi, ; Houssa, ; Cham, ; Alagidede et al ., ; Chuku, ; Dufrénot and Sugimoto, ; Asongu, , , ; Harvey and Cushing, ) and conditional feasibility (Bénassy‐Quéré and Coupet, ; Bangaké, ; Ekpoh and Udoh, ; Asongu, ; Saka et al ., ).…”

“…Ekpoh and Udoh () focused on what would be required to enhance the process of monetary integration by providing an analytical perspective of the costs of monetary union stability, notably the loss of country‐specific ability to use monetary policy to stimulate aggregate productivity. The authors further argue that economic policy coordination and channels of effective risk‐sharing would improve a monetary union's consolidation process.…”