Business & Entrepreneurship Journal

The Integration of Economic Monetary Policy Systems of West African States

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• Abstract

  A motion has been moved by the Economic Commission for West African States (ECOWAS) for the unitization of all monetary policy systems in the West African hemisphere. Its ultimate aim being the introduction of a united currency system to be used by all West African countries. Some critics argue that independent monetary and exchange rate policies have been relatively ineffective in influencing domestic economic activities, while others state that a monetary union among West African states would be costly taking into consideration the magnitude of accompanying shocks to each domestic economic system. What is the way forward? Do we lend an ear to the proposal adopted by the ECOWAS Convergence Council that establishes the modalities for the realization of a united or single currency objective under the ECOWAS Monetary Cooperation Programme (EMCP); or do we keep in place a separate or divided system of monetary policy operation? This article intends to review the pros and cons attached to this major issue by reviewing, in general, the individual monetary policy systems currently in operation by these West African countries and envisaging what a united monetary policy system could achieve (in the long run); its advantages, as well as disadvantages.