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N° 243 |
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| March 2005 |
| Africa Puts Forward
its Eco |
| Agnès Bénassy-Quéré |
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| European monetary union has
contributed to projects for monetary union being relaunched in other parts of
the world. The most advanced is without any doubt that of the “second”
west African monetary union, which binds together five non members countries of
the West African Economic and Monetary Union (WAEMU), though the second union
is ultimately set to merge with the WAEMU. In 2002, the project for the second
union led to the creation of a West African Monetary Zone (WAMZ), and the monetary
unification of these five countries is scheduled for 1st July 2005. However, the
process of convergence is far from being completed and the union might well be
postponed. These problems raise questions about the feasibility of the project
and the monetary borders of the region. For each country the costs and benefits
are analysed with respect to criteria defined by the theory of optimal currency
areas. A summary analysis classifying the countries according to their economic
proximity is put forward. This suggests that the WAEMU is a relatively homogenous
group, which is not the case for the countries of the WAMZ, whose members thus
do not have much interest in rapid monetary unification. |
Abstract |
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