Regional Integration in West Africa: Is There a Role for a Single Currency?

The Economic Community of West African States is perhaps the strongest subregional organization in Africa. In 2019, the member governments agreed to form a currency union, which they intend to launch by 2027. Prasad and Songwe’s short book assesses the plan’s prospects. They concede that the potential economic benefits of a currency union are significant in terms of greater trade and investment and that it could enhance the macroeconomic discipline of member governments and protect them from external shocks. Still, their informative account focuses mostly on the likely pitfalls. They argue that a successful launch of such a union would require much greater economic and policy integration among the countries and much stronger institutional mechanisms for fiscal coordination and risk management. In the absence of such arrangements, they recommend taking more modest steps to further the financial and economic integration of the region, such as harmonizing economic and financial policies and encouraging the development of a regional financial market.