Fiscal Deficit Sustainability of West African Monetary Zone Countries

As part of the preconditions for a successful formulation of Monetary Union in any region, the prospective member countries should share similar characteristics in terms of fiscal and monetary policies- single digit inflation rate, adherent to a specified interest rate, regulated exchange rates, achievement of progressive economic growth, limited deficit financing by their central banks among others, so that it would not be a union of unequal partnership. Six countries in West Africa set their agenda in year 2000 which include; formulation of West African Monetary Zone(WAMZ), introduction of single currency and establishment of common central bank in 2003, purposely to foster trade, regional growth, financial market development of member countries, regional development and so on. This book provides insight, through descriptive and econometric analyses, to the prospective of membership of three countries out of six; Ghana, Guinea and Nigeria, in the proposed WAMZ, by analysing each country's fiscal deficit sustainability as a prerequisite for membership.