Monetary integration in West Africa
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Volume 5 Number 1
Monetary integration in West Africa Iwa Akinrinsola Queen Mary College Office, British Institute of International and Comparative Law, Room G3, Charles Clore House, 17 Russell Square, London, WC1B 5DR, UK tel: +44 (0)20 7862 5173; e-mail: [email protected]
Iwa Akinrinsola is a doctoral student at the International Financial Law Unit, Centre for Commercial Law Studies, Queen Mary College, University of London where she works as a teaching/research assistant on the LLM programme.
ABSTRACT This paper assesses the monetary union proposed by anglophone West African states. It considers whether the basic components for an effective monetary union exist by assessing previous economic integration efforts in the subregion. Such efforts include the establishment of a common market. It assesses the failure of the attainment of these efforts, which is the result of inadequate legal and institutional infrastructures at both regional and domestic levels. It suggests that a sustainable monetary union can only be achieved against the backdrop of such infrastructures. It focuses, in particular, on the roles of these infrastructures at the regional level and assesses the effect of their operation on a monetary union goal.
INTRODUCTION The anglophone states of the Economic Community of West African States (ECOWAS) have proposed the establishment of a monetary union for 2005. The monetary systems of these states have been characterised by instability, which has partly been attributed to the peculiarities of their colonial currency history. The
position is somewhat different in the francophone West African states. These states retained their colonial currency arrangement with France after independence and have secured a stable currency since then. The anglophone states believe that a monetary union will help achieve monetary stability in their states. However, the proposal for a monetary union has been made against the backdrop of failed regional economic efforts within the region. The failure of these efforts has been attributed to the lack of adequate legal and institutional infrastructure for economic integration. This paper analyses the institutional development for a monetary union and assesses the reasons why integration efforts in the past have failed in the anglophone states of West Africa. The paper is divided into three sections. The first section provides an analysis of the institutional and legal arrangements in place for the operation of the monetary systems in colonial British West Africa. The next section considers regional economic efforts after independence and provides a comparative analysis with the European Union (EU). The third section assesses the legal and institutional failures of integration efforts in West Africa after independence, in particular with regard to the attainment of the objectives of a common market, which is a sine qua non to a monetary union. The paper finishes with some concluding remarks.
Journal of International Banking Regulation, Vol. 5, No. 1, 2003, pp. 21–34 # Henry Stewar
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