West Africa and the Global Financial Crisis

West Africa and the Global Financial Crisis


In June 2010, West African scholars based in Africa, Europe and North Africa met in Accra, Ghana, with senior officials of West African Central Banks, the African Development Bank (AfDB), the West African Economic and Monetary Union (WAEMU) and the Economic Community of West African States (ECOWAS) to debate for two days on issues pertaining to regional integration in their sub-region. A mix of policy-focused and academic manuscripts were presented and discussed with one single goal in mind: to expand and deepen current understanding of the challenges and opportunities that arise from West Africa’s pursuit of economic and social progress through the strategy of regional integration. The deliberations of the Conference illustrated the extent to which African policymakers and researchers share a common understanding of the challenges faced by Africa in the present context and their eagerness to maintain a high level of policy debate.

This eagerness may perhaps have risen from the sense of urgency harbored by many actors and caused by the disappointingly insufficient volume of state-of-the-art research that currently supports the advanced level of progress in the sub-region’s process of regional integration. Indeed, there is general consensus that research must quickly respond to, and sometimes even lead, policymaking to contribute to its success. The manuscripts that served as the basis for the discussions also helped revisit many commonly-held policy views through the scrutiny of rigorous scientific inquiry and therefore strengthened the factual foundations of regional policy undertakings. This no doubt enhances the reliance of policymaking on research and contributes to widespread consensus on what needs to be done. As a result, the combined contributions of all the authors provide a fair degree of achievement in the reconstruction of the jigsaw puzzle that is regional integration in West Africa and help formulate a comprehensive and coherent growth-inducing and socially acceptable integrative design.

The present book seeks to provide answers on many facets of the challenges related to region-wide policymaking. Through its 13 chapters it aims to cover a wide spectrum of policy issues of the day and to display a sense of vision that spans the entire planning horizon of most stakeholders. It opens with a chapter that reviews the impact of the recent global financial crisis on the economies of the sub-region, and a thorough examination of the economic shocks that are characteristic of the economies of West African Monetary Zone (WAMZ) countries – five non-CFA countries. In a second section that addresses the burning issue of the Common Currency, one study discusses the political economy of creating a West African Monetary Zone while a second one assesses the optimality underlying such a project. A third manuscript reports on the performance of the WAEMU after 15 years of operations and suggests strategies for its future institutional development. In section 3, two complementary studies examine the record and impact of inflation, one for the case of WAEMU countries and the other for WAMZ economies.

Section 4 hosts four studies on topics such as the implications of fiscal operations on regional economic integration, the challenges of financial and trade policies under regional integration, the relationship between bank concentration and monetary policy in WAEMU countries, and the volatility and convergence of stock markets in WAMZ countries. In a fifth and final section whose underlying stakes are paramount for the future of the West African sub-region, two studies deal with aspects of human

development. One addresses the link between currency integration and human development and the other focuses on the relationship between education and development under regional integration.

It is true that 13 chapters cannot solve all the development challenges of West Africa. It is equally true that this is an ongoing process that has started and will most likely continue into the foreseeable future. Indeed, from now on science will drive the broader and deeper dialogue between research and policy in the sub-region, and, by all accounts, it is quite welcome. The book also aims to perpetuate the historic roles of leader and model played by West Africa in the integration process of the entire continent. Two final key considerations deserve mention and must be kept in mind by the reader. First, regional integration is unequivocally the strategy chosen by West African countries as their common quest for development. It is also a collective commitment to their shared fate and an expression of their strongest bond. Second, the way in which regional integration will be used by these countries to achieve social and economic progress will be designed by West African minds and implemented by the will of West African policymakers. One hopes that it is irreversible.

Diery Seck, Editor

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