Regional Financial and Economic Integration in West Africa

Previous studies of the Economic Community of West African States (ECOWAS) have evaluated the union’s success in comparison to other integration initiatives and according to traditional theory on the optimum currency area, which calls for high intraregional trade and correlated business cycles. This study seeks to determine the prospects for further integration in West Africa given the region’s unique characteristics and the particular experience of ECOWAS countries. Based on results from a gravity model analysis, participation in the CFA monetary union and ECOWAS’ preferential trade agreements appear to have improved intraregional trade. However, the challenges of political instability, maintaining fiscal resources, and finding a suitable monetary anchor present considerable concerns for the creation of a single West African Monetary Zone. 1 Thanks to my advisor Prof. McKinnon for your thought-provoking ideas and careful insights. Thanks also to Geoffrey Rothwell, Mary Sprague, Prof. Samoff, Prof. Roberts and the Center for African Studies Thesis Workshop Group for your additional advice and for challenging me to question my research thoroughly. Lastly, thanks to all my friends and family for your unfaltering support in innumerable ways. This is for each one of you.