Paper short abstract:

The colonial era left a legacy of African dependence. The success of independence in the 1960s gave the African leaders the impetus to work towards self-reliance and poverty reduction through economic development. Trade promotion through regional economic cooperation has been the chosen strategy.

Paper long abstract:

After independence, African leaders embarked on the objectives of unity, self-reliance, economic development and poverty reduction. The transformation of the Organisation of African Unity to the African Union in 2000 demonstrates Africa's determination to integrate their economies with a single currency in mind by 2021. Since then a number of overlapping regional economic communities have been established.

In West Africa, fifteen countries planned to form a single currency by 2020. Eight of these (French speaking) already have a single currency, the CFA, linked to the Euro. The other countries (English speaking) are expected to form a single currency by 2015. The two currencies will merge into one by 2020. However, the planned original date of 2005 for this currency was postponed and again in 2009 due to the failure of the countries meeting the convergence conditions.

The economists' argument for a single currency is the increase in trade and investment within members. On the other hand member states will lose the independence of their central bank. In a single currency zone only one central bank oversees the problems of all members which creates the 'one size fits all problem'.

The objectives of this research are to evaluate whether fluctuation in currencies affect trade within West Africa and to what extent these countries meet the conditions for single currency. The study will focus on a comparison of the Francophone (monetary union) and Anglophone (non-monetary union).

Keywords: African integration, single currency, trade