Central Bank of Nigeria
Common Currency, West Africa, Nigeria, West African Sub-Region
An important element of the economic integration process in West Africa is the achievement of monetary co-operation which can take various forms such as the clearing house mechanism, European Monetary System Model, Parallel Union Currency Model and Common Currency Area. The paper traced the efforts by ECOW AS at evolving monetary co-operation and also analysed the prospects for Nigeria of a common currency in the West African sub-region. The paper identified and discussed the costs and benefits of a common currency to member nations, especially Nigeria. The costs include loss of autonomy by individual governments in major areas of monetary and fiscal policy, costly exchange rate adjustment and lower banking system credit to government. On the other hand, the beneficial effects include a possible increase in capital inflow and investment, an enlarged market for Nigeria's exports, reduction in smuggling and perhaps a more effective control of government deficit financing. On balance, however, the paper concluded that a common currency for the West African sub-region would be beneficial to all the countries within the Region and Nigeria in particular.
CBN Economic and Financial Review
Ogbe, N. E. (1987). Common Currency for West African Sub-Region: Prospects for Nigeria. CBN Economic and Financial Review. 25(4), 48-53.