The Impact of Trade Integration on the Business Cycles Synchronization in West African Countries: Implications for the AfCFTA

Ahmed Yago (), Samba Diop (), Cheikh Ndiaye () and Simplice Asongu
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Ahmed Yago: Saint-Louis, Sénégal
Samba Diop: Saint-Louis, Sénégal
Cheikh Ndiaye: Saint-Louis, Sénégal

No 26/027, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.

Abstract: This article analyzes the link between business cycles synchronization and trade integration using panel data for 15 West African countries from 2000 to 2020. Business cycles synchronization is a key requirement from the standpoint of establishing a common currency by 2027. We add to the body of literature by considering intra-industry trade and accounting for the effect of fiscal, monetary and exchange rate policies. Our results suggest that trade intensity is positively related to the synchronization of business cycles in West Africa. However, intra-industry trade is not the major factor explaining the co-movements of the business cycles. Indeed, our findings indicate that the enhancement of fiscal, monetary, and exchange rate coordination fosters the synchronization of business cycles. The study’s results have relevant policy implications for the proposed formation of a West African currency union.

Keywords: Business Cycles Synchronization; Trade Intensity; Intra-Industry Trade; Policy Coordination; West Africa (search for similar items in EconPapers)
JEL-codes: E32 E61 F15 O55 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2026-01
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http://www.afridev.org/RePEc/agd/agd-wpaper/27.The ... s-for-the-AfCFTA.pdf Revised version, 2026 (application/pdf)

Related works:
Journal Article: The impact of trade integration on the business cycles synchronization in West African Countries: Implications for the AfCFTA (2026)
Working Paper: The Impact of Trade Integration on the Business Cycles Synchronization in West African Countries: Implications for the AfCFTA (2026)
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