This chapter evaluates whether a monetary union makes economic sense and discusses the institutional requirements for a successful Monetary Union in West Africa (ECOWAS). The chapter considers how best the political momentum for a union can be channeled toward a fundamental improvement in underlying policies. The paper also reviews the economic situation of the ECOWAS members, with the objective of evaluating the ease with which they can proceed to a common currency. Regional integration resulting in greater trade among ECOWAS countries may help increase efficiency of production. Trade among developing countries, in general, is likely to have fewer efficiency benefits than trade with developed countries, however, because the possibilities of exploiting complementarities are less. The foregoing considerations suggest that the momentum in favor of monetary union should be channelled into the crucial first phase of enhanced mutual surveillance and emphasis on each country improving its macroeconomic and structural policies. Success in this endeavor would in and of itself help to increase exchange rate stability.
For over 10 years, the IMF has supported adjustment and reform programs in many of its low-income members through two facilities established specifically for that purpose - the Enhanced Structural Adjustment Facility (ESAF) and its precursor the Structural Adjustment Facility (SAF). By the end of 1994, 36 countries had availed themselves of these facilities, in support of 68 multi-year programs. This study summarizes the findings of a review of the experience under these programs and of economic developments in the countries that undertook them.
Kyong Mo Huh, Ms. Benedicte Vibe Christensen, Peter J. Quirk, and Toshihiko Sasaki
In recent years, an increasing number of developing countries have adopted market-determined floating exchange rates. This development has represented a significant step forward in the evolution toward exchange rate flexibility that has taken place in the developing country group since the adoption of generalized floating by industrial countries in 1973.
Mr. Saleh M. Nsouli, Mr. John B. McLenaghan, and Mr. Klaus-Walter Riechel
One of the principal aims of the effort to integrate the economies of the 16 member countries of the Economic Community of West African States (ECOWAS) is to expand intra-Community trade. This objective is to be achieved partly through the elimination of quantitive and other restrictions on trade.
Many studies on International tax compaisons have been undertaken since the early 1970s. While controversial, such studies have facilitated more subtle comparisons of a country's tax performance than would be afforded by focusing on its simple tax ratio.
Mr. Vito Tanzi, M. Zühtü Yücelik, Mr. Peter S. Griffith, and Mr. Carlos A. Aguirre
This study indentifies some of the taxation problems most frequently encountered by Fund member countries in sub-Saharan Africa and seeks solutions that may be useful to either the region as a whole or to groups of countries in the region.
Mr. Ulrich Baumgartner, Mr. G. G. Johnson, K. Burke Dillon, R. C. Williams, Mr. Peter M Keller, Maria Tyler, Bahram Nowzad, Mr. G. Russell Kincaid, and Mr. Tomás Reichmann
The external indebtedness of non-oil developing countries has been of growing concern in recent years. Several factors have brought the debt issue to the forefront of the problems facing a number of countries, including the rapid rise in extenal debt in the recent past, changes in the composition of debt (toward a greater proportion owed to commercial banks) and the attendant deterioration in the terms of debt, and the rise in debt service resulting from these developments.