Towards West-Africa regional economic integration: Formalizing the informal sector

Oluwole Ibikunle Ogunyemi and Adebayo Sunday Adedokun

No 332450, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: The existence of large informal economy is one reason for the developing countries not to be benefiting fully from the world economy through integration. The countries have remained behind those of the north in global financial, monetary and market development. The paper employed secondary data for Nigeria, the largest economy in the West- African sub-region, computes the indication of the informal sector in the country with monetary variables and develops an Informal-Formal Sector Transmission Model for Economic Integration. The data were analysed using currency-money supply approach, graph and tables. The ratio of currency in circulation to M2 indicates that the incidence of the informal sector shrunk between 1960 and 2013. The currency outside bank to M2 ratio reduced from 9.39 to 8.81 per cent while currency in circulation to M2 ratio reduced from 11.96 to 10.66 per cent in 2010 and 2013 respectively. The Model explains the means of transforming informal sector to formal sector that leads to market access in which all artificial barriers to trade are removed to facilitate free trade flows within West-Africa. The paper reflects that with market access for the formal sector, countries would benefit in terms of growth, employment, poverty reduction, intra regional trade and labour mobility. This will promote the drive for financial and monetary union as well as economic integration of the sub-region. The paper recommends the registration of informal activities, the establishment of Informal Sector Institute and provision of inputs support for the sector.

Keywords: Labor and Human Capital; International Relations/Trade (search for similar items in EconPapers)
Pages: 29
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/332450/files/7161.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332450

Access Statistics for this paper

More papers in Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().