INTRODUCTION
BACKGROUND OF THE STUDY
The actual study for establishment of a common currency for west African state (ECOWAS) and drafting of a programme of monetary and fiscal polices of members states was between 1985 and 1986 period (Arah, 2001: 29). In response to the study, the sub-region monetary co-operation programme involving short and long term measures were seen to be economic flight (Ogwuma 1998:3). The highest level of economic integration is the monetary union, which involves the integration of trade and micro-economic policies and establishment of a common central bank and a single currency.
The establishment of a monetary union is however consequent on the member states, meeting the convertibility condition of monetary and fiscal prudence and other macro – economic convergence indicators which are the short and long term measures. The short term measures were settlement of areas in the west Africa monetary agency (WAMA), clearing system establishment of a credit guarantee fund, introduction of new payment instrument like ECOWAS travelers cheques and extension of the range of products eligible for transactions through the clearing system. According to Ezema (2001;30) the long term measures include liberation of trade and payment system in all member countries, liberation of all interest and exchange rate, reduction of inflation to a single digit and creation of a single currency zone within the sub-region by the year 2000 (the deadline for achieving the measure by all member countries was set for 1988). However, most member states beat the deadline while the traveler cheques issues was delay due to political and economic muscle flexing between the Unions Economiuqe Manetaire Quest Africa (UEMQA) members and the rest. The traveler cheques afforded one of the most realistic steps towards achieving economic integration and a single momentary zone, but had to suffer several postponement due to various reasons. The initial disagreement among member states was on the modalities for finding the cheques out of the ‘ghost” or imagined position to the members in the scheme of things. In the words of Olajide (2001:31) at another attempt in 1998, some CFFA zone members did not attend the summit on the ground that the delegates wanted to conclude some contracts with their home governments. This was done without notice even as it suffered postponement for another meeting with France before that of the travelers cheques launch.
In February 1998, at the planned launching in Abuja, all disagreement were resolved under the auspices of an adequate-hoc committee set up by the ECOWAS heads of states composing Cote D’ voice, Ghana, Mali, Togo and Nigeria. Univocally, the CFA zone members were in vanguard of the launching of the travelers cheques in 1999. Ostensibly due to the successful establishment of Euro (the European common currency which will take over the national currencies in Europe in 2004), and therefore effectively terminate the French Support for CFA. On December 15, 2000, heads of state and governments of ECOWAS in Bamako, Mali approved the decision to establish a common currency by 2003. the decision was the result of the initiative take by Ghana and Nigeria in a bilateral economic meeting on December 1999 to adopt a two – track system called FAST TRACK APPROACH (FTA) to the implementation of ECOWAS integration programmes for West African in 2004. The fast track approach recognize the need to have a parallel zone christened West Africa monetary Zone (WAMZ) the UEMOA to work for a gradual merger of the two at appointed period in line with the deadline.
TABLE OF CONTENTS
Title Page II
Approval page III
Dedication IV
Acknowledgement V
Table of contents VII
List of tables
Proposal VI
CHAPTER ONE
1.0Introduction 1
1.1Background of the study1
1.2Statement of the problem 4
1.3Purpose of the study 5
1.4Research questions 6
1.5Significance of the study 6
1.6Scope and limitation of the study 7
reference 9
CHAPTER TWO
Literature review 10
2.1Introduction 10
2.2West African Countires – ECOWAs 12
2.3Problem of ECOWAs 17
2.4West African Currency Board (WACB) 18
2.4.1West African Currency Board operation 20
2.4.2The concept – common currency 21
2.5Global common currency 23
2.5.1The Euro – Dollar 23
2.6The need for global common currency 24
2.7Management, headquarters and mode of operation of West African Common Currency 31
2.8The prospect o common currency for West African 33
2.9The problems facing the establishment of common currency for Africa. 35
2.10References 39
CHAPTER THREE
Research methodology
3.1Method of investigation 42
3.2Instrument of data collection 42
3.3Primary sources of data 43
3.4Secondary sources of data 43
3.5Population and determination of sample size 44
3.6Validity and reliability of research instrument 46
CHAPTER FOUR
Data presentation and analysis 47
4.1Data analysis techniques 47
4.2Analysis of questionnaires48
CHAPTER FIVE
Summary of findings, recommendations and conclusion
5.1Summary of findings 65
5.2Recommendations 66
5.3Conclusion 68
Bibliography 69
Appendix 73
