Regional Convergence among Anglophone West African Countries: Evidence from Interest Rate Analysis

Amos Twum and Meshach Aziakpono

The African Finance Journal, 2022, vol. 24, issue 2, 1-16

Abstract: We examined convergence among Anglophone countries that form the West African Monetary Zone (WAMZ) using the interest rate pass-through (IRPT) and factor analysis with monthly data from 1980 to 2020. The results show an incomplete IRPT in the Zone. However, we generally find high convergence between Ghana and Nigeria, with occasional addition of Sierra Leone or Liberia depending on the specification. We found that Nigeria, Ghana, and Gambia have high monetary integration while Nigeria, Ghana, and Liberia have high financial integration. The results generally show that Nigeria is dominant in the WAMZ in terms of their policy and retails rates influence.

Keywords: Financial integration; Monetary integration; West African Monetary Zone; Interest rate pass-through; Factor analysis (search for similar items in EconPapers)
JEL-codes: E42 E43 E52 E58 F36 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:afj:journl:v:24:y:2022:i:2:p:1-16

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