TOWARDS A SECOND MONETARY ZONE IN WEST-AFRICA: A TEST FOR LONG-RUN CONVERGENCE
TOWARDS A SECOND MONETARY ZONE IN WEST-AFRICA: A TEST FOR LONG-RUN CONVERGENCE
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Date
2011-08
Authors
POTENTIAL, Umar Abdullahi
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Abstract
he study investigates the possibility of the WAMZ member countries converging towards the
formation of a second monetary arrangement within the West African sub-region by 2015.
In this line targets were set for the member countries to be met in order to ensure a strong and
viable unification. Hence, the precondition for the take-off requires that atleast three countries
must satisfy atleast three primary and secondary criteria. However, despite past efforts towards
this project continuous postponements have been the tradition. The work applies cointegration
techniques to search for long-run convergence among the five countries; Gambia, Ghana,
Guinea, Nigeria and Sierra Leone. Data on all the criteria; budget deficit/GDP ratio, inflation
rate, budget deficit financing/tax revenue, gross external reserves, domestic arrears, tax
revenue/GDP ratio, wage bill/tax revenue ratio, public investment/tax revenue, real interest rate
and real exchange rate were analysed to test for their co-movement. The findings show that, base
on the prevailing situation and taking things as they were, the countries are most likely to meet
the set targets for the commencement of this project by 2015. It therefore implies that, a second
monetary zone is feasible on or before the set date especially if the countries put more efforts
and discipline
Description
BEING A THESIS SUBMITTED TO THE SCHOOL OF
POSTGRADUATE STUDIES, AHMADUBELLO UNIVERSITY,
IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR
THE A WARD OF DEGREE OF MASTER OF SCIENCE IN
ECONOMICS, DEPARTMENT OF ECONOMICS,
AHMADU BELLO UNIVERSITY, ZARIA.
AUGUST 2011
Keywords
MONETARY ZONE,, WEST-AFRICA, LONG-RUN CONVERGENCE