Ecowas Common Currency: How Prepared Are Its Members?

Mati, Sagiru; Civcir, Irfan; Özdeşer, Hüseyin

doi:10.22201/fe.01851667p.2019.308.69625

Cited by 17 publications

(20 citation statements)

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“…100 For instance, the Economic Community of West African States (ECOWAS), at the end of its July 2009 Summit in Abuja, announced the decision to adopt the ECO as a single currency for the regionan initiative that has been seen as a milestone towards concretizing the AfCFTA. 101 In a political ploy, and with the complicity of France, the eight francophone ECOWAS countries proceeded prematurely in December 2019 to announce a rebranding of the CFA Franc to henceforth be called the ECO. 102 France followed through with new legislation in May 2020 purportedly ending its fiscal hegemony over the eight ECOWAS francophone countries, a move which Kamga finds unconvincing, in the sense that convertibility of the ECO would remain guaranteed by France and pegged to the Euro at the same rate that the CFA Franc is pegged to the Euro.…”

Section: Capitalist Problem Matrix Of Economic Interest and The Ineptitude Of African Governmentsmentioning

confidence: 99%

Right to Development Governance in the Advent of the African Continental Free Trade Area

Ngang

2021

J. Afr. law

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In this article, I explore the question of whether the African Continental Free Trade Area (AfCFTA) could provide the framework mechanism for actualizing the right to development in Africa. The imperative for socio-economic and cultural development suggests rethinking the manner in which Africa is governed and, importantly, also the necessity of putting into place functional mechanisms in view of enacting the future that is envisaged for the continent. Article 22(2) of the African Charter enjoins state parties to individually or collectively undertake measures to give effect to the right to development. After several futile endeavours aimed at finding an appropriate mechanism for development, Africa eventually takes a giant stride in establishing the AfCFTA. From a decolonial perspective, I examine the prospects of the AfCFTA, particularly with regard to competing interests that dominate the African development space. At face value, the AfCFTA appears to provide an enabling framework for the nurturing of productive capabilities, the flourishing of local initiatives, the eradication of poverty and expanded opportunities for development. Notwithstanding, I contend that the inherently neoliberal nature of the AfCFTA leaves a further question of whether the free trade area is likely to deliver socio-economic and cultural development benefits to the peoples of Africa.

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Section: Capitalist Problem Matrix Of Economic Interest and The Ineptitude Of African Governmentsmentioning

confidence: 99%

Right to Development Governance in the Advent of the African Continental Free Trade Area

Ngang

2021

J. Afr. law

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“…Several studies have shown the weak or negative correlation of macroeconomic shocks affecting ECOWAS countries (Houssa, 2008;Mati et al, 2019;Debrun et al, 2005). However, these studies analyze the effects of shocks on each economy.…”

Section: Economic and Monetary Integration In Ecowasmentioning

confidence: 99%

Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks

Ndongo¹,

Diop²

2021

WJAE

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This paper studies the impact of output, exchange rate, price, and economic policies (fiscal and monetary) shocks to Economic Community of West African States (ECOWAS) economies over the period 1977-2019. The results of the impulse response functions obtained from the panel VAR show that monetary policy shocks stimulate economic activity, whereas fiscal shocks lead to a contraction. Moreover, these economic policy shocks lead to an increase in the price level. Finally, they have opposite effects on the real exchange rate: a monetary policy shock leads to an appreciation of national currencies against the US dollar, while a fiscal innovation leads to a depreciation of these currencies. As for exchange rate and price shocks, they create inflation and consequently a decline in economic activity. Furthermore, the forecast error variance decomposition reveals that real exchange rate shocks contribute the most to future fluctuations in macroeconomic variables in ECOWAS countries. Moreover, a comparison of the impact on the two currency areas, West African Economic and Monetary Union (WAEMU) and West African Monetary Zone (WAMZ), shows the degree of asymmetry between the two areas. The analysis shows, on the one hand, that shocks are more persistent and significant in the WAMZ and, on the other hand, that except for real exchange rate shocks, the two zones respond asymmetrically to shocks emanating from the other variables.

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“…For automatic economic stabilisers, they are almost non-existent. Real business cycle amongst member countries ECOWAS (Mati et al. , 2019) and amongst the WAMZ countries (Houssa, 2018) have also been found to be asymmetric.…”

Section: Introductionmentioning

confidence: 99%

Monetary policy and nonperforming loan ratios in a monetary union; a counterfactual study

Napari¹,

Özcan²,

Khan³

2023

JES

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PurposeFor close to two decades, the West African Monetary Zone (WAMZ) has been preparing to launch a second monetary union within the ECOWAS region. This study aims to determine the impact such a unionised monetary regime will have on financial stability as represented by the nonperforming loan ratios of Ghana in a counterfactual framework.Design/methodology/approachThis study models nonperforming loan ratios as dependent on the monetary policy rate and the business cycle. The study then used historical data to estimate the parameters of the nonperforming loan ratio response function using an Autoregressive Distributed Lag (ARDL) approach. The estimated parameters are further used to estimate the impact of several counterfactual unionised monetary policy rates on the nonperforming loan ratios and its volatility of Ghana. As robustness check, the Least Absolute Shrinkage Selection Operator (LASSO) regression is also used to estimate the nonperforming loan ratios response function and to predict nonperforming loans under the counterfactual unionised monetary policy rates.FindingsThe results of the counterfactual study reveals that the apparent cost of monetary unification is much less than supposed with a monetary union likely to dampen volatility in non-performing loans in Ghana. As such, the WAMZ members should increase the pace towards monetary unification.Originality/valueThe paper contributes to the existing literature by explicitly modelling nonperforming loan ratios as dependent on monetary policy and the business cycle. The study also settles the debate on the financial stability cost of a monetary union due to the nonalignment of business cycles and economic structures.

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Ecowas Common Currency: How Prepared Are Its Members?

Cited by 17 publications

References 0 publications

Right to Development Governance in the Advent of the African Continental Free Trade Area

Right to Development Governance in the Advent of the African Continental Free Trade Area

Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks

Monetary policy and nonperforming loan ratios in a monetary union; a counterfactual study

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