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Single market and single currency: does ECOWAS sub-region stand to gain?

Author Affiliations

  • 1Department of Economics, Olabisi Onabanjo University, Ago Iwoye, Ogun State, Nigeria
  • 2Department of Economics, Babcock University, Ilishan Remo, Ogun State, Nigeria
  • 3Department of Economics, Olabisi Onabanjo University, Ago Iwoye, Ogun State, Nigeria

Int. Res. J. Social Sci., Volume 8, Issue (3), Pages 54-57, July,14 (2019)

Abstract

This paper has reviewed experience of the European Monetary Union and Optimal Currency Area Theory with a view to recommending the use of a single currency in ECOWAS sub region. Consequently, the paper submitted that the optimal benefits of free movement of goods, services, people and capital in ECOWAS sub region would be a mirage if the exchange-rate uncertainty and transaction costs of different currencies are not removed via the use of a common currency within the region. However, there is a need for a formidable independent apex bank which would regulate the stability of price in the region. It is not a gainsay that the use of a single currency within ECOWAS sub region would result in a monumental phenomenon by ensuring macroeconomic stability, improving efficiency and resource allocation, eliminating the risk associated with exchange-rate and promotion of the international use of the common currency which will make the economic block to be more resilient to shocks in global capital flows. More importantly, the founding goals of ECOWAS would not be fully realized unless there is an emergency of a single currency alongside the existing single market in the region. ECOWAS should draw some lessons from the experience of European Monetary Union and find the model that would best suit its economic and political ambitions, and that of the citizens in the region.

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