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On the Adequacy of Monetary Arrangements in Sub-Saharian Africa


  • Agnès Bénassy-Quéré
  • Maylis Coupet


We examine the economic rationale for monetary union(s) in Sub-Saharan Africa through the use of cluster analysis on a sample of 17 countries. The variables used stem from the theory of optimum currency areas and from the fear-of-floating literature. It is found that the existing CFA franc zone cannot be viewed as an optimum currency area: CEMAC and UEMOA countries do not belong to the same clusters, and a 'core' of the UEMOA can be defined on economic grounds. The results support the inclusion of the Gambia, Ghana and Sierra Leone in an extended UEMOA arrangement, or the creation of a separate monetary union with the 'core' of the UEMOA and the Gambia, rather than the creation of a monetary union around Nigeria. Finally, the creation of the West African Monetary Zone (WAMZ) around Nigeria is not supported by the data. Copyright Blackwell Publishing Ltd 2005.
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  • Agnès Bénassy-Quéré & Maylis Coupet, 2003. "On the Adequacy of Monetary Arrangements in Sub-Saharian Africa," Working Papers 2003-11, CEPII research center.
  • Handle: RePEc:cii:cepidt:2003-11

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    Cited by:

    1. Fritz, Barbara & Mühlich, Laurissa, 2007. "South-south monetary integration: the case for a research framework beyond the theory of optimum currency area," Discussion Papers 2007/20, Free University Berlin, School of Business & Economics.
    2. Moshi Optat Herman & Kirsten Wandschneider & Thierry Warin & Phanindra Wunnava, 2011. "Southern African Economic Integration: Evidence from an Augmented Gravity Model," The African Finance Journal, Africagrowth Institute, vol. 13(1), pages 1-13.
    3. Souleymane Coulibaly & Lionel Fontagné, 2006. "South--South Trade: Geography Matters," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(2), pages 313-341, June.
    4. Simplice A. Asongu, 2013. "Real and monetary policy convergence: EMU crisis to the CFA zone," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 5(1), pages 20-38, April.
    5. George S. Tavlas, 2009. "The Benefits And Costs Of Monetary Union In Southern Africa: A Critical Survey Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(1), pages 1-43, February.
    6. Sampawende Jules TAPSOBA, 2009. "Union Monétaire en Afrique de l’Ouest: Quelles Réponses à l’Hétérogénéité des Chocs ?," Working Papers 200912, CERDI.
    7. Buigut, Steven & Valev, Neven T., 2009. "Benefits from Mutual Restraint in a Multilateral Monetary Union," World Development, Elsevier, vol. 37(3), pages 585-594, March.
    8. Sampawende Jules Tapsoba, 2011. "Union Monétaire en Afrique de l'Ouest: Quelles Réponses à l'Hétérogénéité des Chocs ?," Working Papers halshs-00554309, HAL.
    9. Couharde, Cécile & Coulibaly, Issiaka & Guerreiro, David & Mignon, Valérie, 2013. "Revisiting the theory of optimum currency areas: Is the CFA franc zone sustainable?," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 428-441.
    10. Patrick-Hervé Mbouombouo Mfossa, 2015. "GOUVERNANCE ECONOMIQUE ET STABILISATION DES CHOCS ASYMETRIQUES: Quel mécanisme pour une meilleure viabilité de la CEMAC ?," Working Papers hal-01213989, HAL.
    11. repec:afe:journl:v:19:y:2017:i:2:p:1-18 is not listed on IDEAS
    12. Zhao, Xiaodan & Kim, Yoonbai, 2009. "Is the CFA Franc Zone an Optimum Currency Area?," World Development, Elsevier, vol. 37(12), pages 1877-1886, December.
    13. repec:ebl:ecbull:v:6:y:2008:i:12:p:1-10 is not listed on IDEAS
    14. Tsangarides, Charalambos G. & Qureshi, Mahvash Saeed, 2008. "Monetary Union Membership in West Africa: A Cluster Analysis," World Development, Elsevier, vol. 36(7), pages 1261-1279, July.
    15. repec:eee:riibaf:v:42:y:2017:i:c:p:304-311 is not listed on IDEAS
    16. Houssa, Romain, 2008. "Monetary union in West Africa and asymmetric shocks: A dynamic structural factor model approach," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 319-347, February.
    17. Qureshi, Mahvash Saeed & Tsangarides, Charalambos G., 2012. "Hard or Soft Pegs? Choice of Exchange Rate Regime and Trade in Africa," World Development, Elsevier, vol. 40(4), pages 667-680.
    18. Mahvash S Qureshi & Charalambos G Tsangarides, 2006. "What is Fuzzy About Clustering in West Africa?," IMF Working Papers 06/90, International Monetary Fund.
    19. Gilles Duffrenot & Kimiko Sugimoto, 2010. "Pegging the future West African single currency in regard to internal/external competitiveness: a counterfactual analysis," William Davidson Institute Working Papers Series wp974, William Davidson Institute at the University of Michigan.
    20. Laurissa Mühlich, 2011. "South–South Regional Monetary Cooperation: Potential Gains for Developing Countries and Emerging Markets," Chapters,in: Regional Integration, Economic Development and Global Governance, chapter 13 Edward Elgar Publishing.
    21. Semedo, Gervasio & Gauthier, Laurent & Bensafta, Kamel Malik, 2012. "Pôles de convergence, gains dynamiques de l’intégration économique et monétaire en Afrique de l’Ouest : une approche en termes de clusters," L'Actualité Economique, Société Canadienne de Science Economique, vol. 88(1), pages 37-85, mars.
    22. Coulibaly, Issiaka & Gnimassoun, Blaise, 2013. "Optimality of a monetary union: New evidence from exchange rate misalignments in West Africa," Economic Modelling, Elsevier, vol. 32(C), pages 463-482.

    More about this item


    Monetary block; Franc CFA zone; Optimum currency area;

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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