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This chapter evaluates whether a monetary union makes economic sense and discusses the institutional requirements for a successful Monetary Union in West Africa (ECOWAS). The chapter considers how best the political momentum for a union can be channeled toward a fundamental improvement in underlying policies. The paper also reviews the economic situation of the ECOWAS members, with the objective of evaluating the ease with which they can proceed to a common currency. Regional integration resulting in greater trade among ECOWAS countries may help increase efficiency of production. Trade among developing countries, in general, is likely to have fewer efficiency benefits than trade with developed countries, however, because the possibilities of exploiting complementarities are less. The foregoing considerations suggest that the momentum in favor of monetary union should be channelled into the crucial first phase of enhanced mutual surveillance and emphasis on each country improving its macroeconomic and structural policies. Success in this endeavor would in and of itself help to increase exchange rate stability.

International finance --- International Monetary Fund --- West Africa --- Monetary unions --- Economic Community of West African States --- Africa, West --- Economic integration --- Afrika --- monetair beleid --- 339.92 <6> --- -afrique --- pays en voie de developpement --- union monetaire --- 333.431 --- AFR / Africa - Afrika - Afrique --- 330.05 --- 332.4966 --- Common currencies --- Currency areas --- Currency unions --- Optimum currency areas --- Currency question --- Money --- Economische samenwerking en integratie. Tolunie--Afrika --- afrika --- ontwikkelingslanden --- monetaire unie --- Monetaire Unies. --- C.E.D.E.A.O. --- CEDEAO --- Communauté économique des Etats de l'Afrique de l'Ouest --- Comunidade Económica dos Estados da África do Oeste --- Comunidade Económica dos Estados da África Ocidental --- E.C.O.W.A.S. --- ECOWAS --- Africa, Western --- Western Africa --- Economic integration. --- Working papers --- Economic Community of West African States. --- 339.92 <6> Economische samenwerking en integratie. Tolunie--Afrika --- afrique --- Monetaire Unies --- Monetary unions - Africa, West --- Africa, West - Economic integration --- Banks and Banking --- Exports and Imports --- Foreign Exchange --- Money and Monetary Policy --- Industries: Manufacturing --- Agribusiness --- Financial Aspects of Economic Integration --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Empirical Studies of Trade --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Industry Studies: Manufacturing: General --- International economics --- Currency --- Foreign exchange --- Monetary economics --- Banking --- Manufacturing industries --- Agricultural economics --- Currencies --- Exchange rates --- Terms of trade --- Real effective exchange rates --- International trade --- Economic policy --- nternational cooperation --- Banks and banking --- Nigeria