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A typology of foreign auction markets in sub-Saharan Africa


  • Aron, Janine
  • Elbadawi, Ibrahim


The authors compare and contrast the design and outcomes of different foreign exchange auctions in four countries in sub-Saharan Africa and present a typology of such auctions. They identify two distinct sets of countries in terms of the auctions'features, policy interventions, and outcomes. In Ghana and Uganda, the exchange rate auctions are judged to have been largely on target in exchange rate unification, exchange rate stabilization,and efficient allocation of foreign exchange. The auctions in Nigeria and Zambia, on the other hand, were subject to frequent policy interventions, resulting in unsustainable auctions, inefficient allocation of foreign exchange (through ad hoc disqualifications), limited unification, and a rather volatile exchange rate. The conclusions reached by the authors are broadly corroborated by a statistical analysis of weekly micro-auction data for all four countries.

Suggested Citation

  • Aron, Janine & Elbadawi, Ibrahim, 1994. "A typology of foreign auction markets in sub-Saharan Africa," Policy Research Working Paper Series 1395, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1395

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    References listed on IDEAS

    1. John Y. Campbell & Pierre Perron, 1991. "Pitfalls and Opportunities: What Macroeconomists Should Know About Unit Roots," NBER Chapters,in: NBER Macroeconomics Annual 1991, Volume 6, pages 141-220 National Bureau of Economic Research, Inc.
    2. Cochrane, John H, 1988. "How Big Is the Random Walk in GNP?," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 893-920, October.
    3. Aron, Janine & Elbadawi, Ibrahim A., 1992. "Parallel markets, the foreign exchange auction, and exchange rate unification in Zambia," Policy Research Working Paper Series 909, The World Bank.
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