This paper argues that developments in Europe have been the most important
variable in monetary integration in West Africa. It shows how monetary
integration in West Africa has historically been influenced by two
colonial powers: Britain and France and the state of the relationship between
these two European countries. The consequence of the above is that
Britain and France have become major stakeholders in West Africa and
failure to consult them in monetary integration matters in the region has
always led to suboptimal results in the integration process. The modest
monetary integration success that has been achieved by the Francophone
West African countries for instance have been extensively aided by France
which has acted as the agency of restraint to the arrangement. On the other
hand ECOWAS wide regional integration arrangements have been mainly
unsuccessful because of the sometimes divergent interests of France and
Britain in the region. The consequence is that the idea of a unified West
African monetary area has always failed to gain the support of the two
powerful European stakeholders. Specifically, neither Britain nor France is
willing to act as an agency of restraint for the entire West Africa. The absence
of an agency of restraint also explains the inability of Nigeria and
Ghana to achieve the establishment of a second monetary zone in the region.
The new program, unfortunately, has provided no institutional
framework for dealing with outside stakeholders. Despite the above shortcomings,
the paper argues that the changing political landscape in Europe may alter the nature of incentives behind the interest of foreign stakeholders
in the region. This in itself could create new opportunities for a region
wide monetary integration program in West Africa. To achieve its aim, this
paper, including the current introductory section (Part One), is divided into
seven parts. Part Two traces the origins of monetary integration in the West
African sub-region while Part Three critiques the post-independence
ECOWAS wide monetary integration programs in the sub region. Part Four
analyses the operations of the monetary integration program in post independence
Francophone West Africa while Part Five examines the origins
and operational modalities of the Second Monetary Zone. Part Six attempts
an analysis of the future direction and opportunities for an ECOWAS-wide
monetary integration Program while Part Seven concludes the paper
