ECOWAS - Macroeconomic Policy Convergence

The West African Economic and Monetary Union (WAEMU) is an existing Customs and Currency Union between eight ECOWAS member States, namely: Benin, Burkina Faso, Guinea-Bissau, Côte d’Ivoire, Mali, Niger, Senegal and Togo. WAEMU came in to existence in 1994 to deepen economic integration and exists as a sub-regional grouping within the ECOWAS. The remaining ECOWAS member States, with the exception of Cabo Verde, are in the process of establishing a Monetary Union under the constituency known as the West African Monetary Zone. According to the ECOWAS Single currency roadmap, the second monetary zone was scheduled to be launched in 2015 for eventual merger of the two by 2020 with a common currency. The launch has however been delayed to ensure effective coordination between fiscal and monetary policies in the ECOWAS region. 

In 2001, ECOWAS set up The West African Monetary Institute (WAMI) in Accra, Ghana to undertake technical preparations and monitoring of quantitative convergence criteria for the establishment of a common West African Central Bank. The ECOWAS Commission, in collaboration with WAMI and WAMA, had set out ten macroeconomic convergence criteria for member States to comply with for the single currency to be implemented. These are known as the Four Primary Convergence Criteria and the Six Secondary Convergence Criteria of quantitative and qualitative benchmarks[1]. Domestication and compliance of the criteria has however not been simultaneous or on a sustainable basis in member States. The initial date for the launch of the single currency was January, 2003. However, the launching has been postponed several times due to member States’ inability to fulfill the set macroeconomic convergence criteria. [2]  The next target for the creation a single currency is 2020.