The Problem with a Currency Union for West Africa

Despite the modest success of their previous attempts at improving regional trade and integration, West African governments are considering turning ECOWAS into a monetary union and adopting a single currency managed by a single central bank.

Written by Oluwaseyi Vincent

May 11, 2020

56th Ordinary Session of the Authority of the Heads of State and Government of the Economic Community of West African States (ECOWAS) opened on the 21st December 2019, at the Banquet Hall, State House, Abuja, Nigeria.

It is a well-accepted idea that trade can promote inclusive economic growth and raise living standards. However, when compared with other regions of the world, trade has historically been very low within Africa. As such, most Africa countries have been unable to reap the economic benefits of regional trade. The opportunities for improved cross-border trade in Africa are considerable, however. A 2019 World Economic Forum report stated that, in 2017, intra-African exports accounted for 16.6 per cent of total exports, compared with 68 per cent in Europe and 59 per cent in Asia.

Africa’s Quest for Regional Integration

Recently, African governments have made considerable efforts to improve regional trade and integration in Africa. The formation of the Africa Continental Free Trade Area (AfCFTA) in 2019 was meant to be a big leap in this direction. Beyond the AfCFTA, there are several regional economic groupings in Africa including the Economic Community of West African States (ECOWAS), the East African Economic Community (EAC), and the South African Customs Union (SACU), among others, which aim to raise living standards and promote regional integration across the continent. However, their success in fostering this integration has been fairly modest.

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About the Author

Oluwaseyi Vincent

is an Associate Lecturer in Economics at the University of York.

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