Financial (Dis)Integration Within ECOWAS

For 50 years, West Africa has struggled to establish financial integration. The East Africa community offers a compelling success story that West Africa can emulate. 

Financial integration is one of those rare economic ambitions that countries all agree on in principle but struggle to execute in practice. The idea is simple: remove barriers to capital flows, harmonize monetary policies, and create a seamless economic bloc. The benefits are obvious—lower transaction costs, increased intra-regional trade and enhanced macroeconomic stability. Yet, the track record of regional economic blocs achieving this is mixed at best.

Nowhere is this dichotomy clearer than in Africa, where two major economic communities—the Economic Community of West African States (ECOWAS) and the East African Community (EAC)—have pursued financial integration with starkly different outcomes. As ECOWAS marks its golden jubilee, it is necessary to reflect on its quest for not just economic integration but more specifically financial integration. ECOWAS has spent nearly 50 years debating a single currency now called the Eco with little to show for it. By contrast, the EAC, since its revival in 2000, has methodically integrated payment systems, harmonized regulations, and leveraged mobile money to create de facto financial unity—even without a formal currency union.

Why has one succeeded where the other flounders? The answer lies not in economics alone but in political cohesion, institutional pragmatism, the embrace of digital disruption, and, as we will see, the practical realities faced by those building the financial bridges...

 

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