On the Computation and Essence of the Nominal Convergence Criteria for Africa Currency Union: ECOWAS in Perspective

Stanley Abban ()

MPRA Paper from University Library of Munich, Germany

Abstract: The ECOWAS in a quest to form a currency union prompted the set out nominal convergence criteria for member states. The study seeks to delineate the importance of the nominal convergence criteria to ensure price and exchange rate stability. In this context, the revised ECOWAS convergence criteria were elaborated to unveil the degree of convergence. Also, the study computed for the realistic nominal convergence targets supposing the union is formed and suggested ex-ante steps to fast track convergence. Additionally, the study showed the exigency for trade and institutional convergence through policy coordination. The study concludes that countries should commit to attaining the convergence criteria in the shortest possible time to aid in the realization of the policy. The study recommends that relatively exposing the large informal sector, ensuring political ramification, and encouraging savings is key to achieving the nominal convergence criteria.

Keywords: nominal convergence criteria; currency union; large informal sector; Optimal Currency Area; inflation; public deficits; public debts; reserves. (search for similar items in EconPapers)
JEL-codes: E5 E52 E61 E63 H2 (search for similar items in EconPapers)
Date: 2020-05-06, Revised 2020-05-10
New Economics Papers: this item is included in nep-afr, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:100215

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