Report on policy convergence criteria and systems in West Africa

Abstract

In West Africa, monetary integration is mainly articulated around WAEMU and WAMZ. Its landscape is characterized by' the cohabitation 0 f multiple and unconvertible currencies that constitute a major obstacle to economic integration. This scheme of macroeconomic policy convergence criteria aimed at reinforcing the common currency and consists of the primary criteria which concern the budget deficit, the reduction of inflation, the ceiling on total public external debt and the internal and external arrears while secondary criteria cover variables such as wage bill and tax revenue ratio, public investment, fiscal revenues and current account deficit. This report dwells on the progress made in the application of macroeconomic convergence criteria and prospects for the creation of a single monetary zone in West Africa It is articulated around five sections. Section two highlights the theoretical justification of the approaches adopted in each of the two monetary zones, while the third section presents the evolution of monetary integration in the entire sub region against action plan. The fourth section questions the reliability of the monetary integration approach in West Africa while the last section concludes on the opportunities and the challenges for a monetary union in this sub region.