Macroeconomic Convergence in West African Monetary Zone

Abstract This study has investigated the issues pertaining to the macroeconomic convergence in West Africa Monetary Zone (WAMZ) countries and the degree of compliance with both the primary and secondary convergence criteria laid down for WAMZ member countries. The study used panel data from 2000 to 2020. The study employed a log-t test for the convergence analysis for the primary and secondary criteria variables for WAMZ member states while comparing results from cointegration test for convergence to estimate all parameters of all equations simultaneously taking into consideration the correlations among the cross-sectional countries. The log-t test result suggests that all the primary criteria variables for convergence have converged. Result equally shows that all the secondary criteria variables have converged except for total national debt percentage of gross domestic product (GDP) which appears to be diverging among WAMZ countries. Therefore, member states of West African Monetary Zone should ensure that full convergence is attained in the nearest future in all the primary criteria variables by ensuring policy coordination and strict compliance of enabling macroeconomic policies. The study recommends the commencement of the WAMZ convergence objective of single currency after full convergence.