Possible Effect of a Common Currency on Nigerian Economic Sustainable Development
- 1Department of Financial Studies, Redeemer\'s University, PMB 230, EDE, Osun, Nigeria
Res. J. Management Sci., Volume 5, Issue (6), Pages 14-20, June,6 (2016)
ECOWAS single currency ‘ECO’ is to be launched in year 2020 by five out of fifteen countries. A major problem to international business all over the world is identified to be currencies and the risk associated with currencies. The cost of doing business is high; transaction is difficult because sometimes the currencies involved in the business are not available. The objective of the study is to evaluate the viability of a monetary union on sustainable economic development. The study used descriptive explanatory survey design which involves the use of questionnaire. The population included 270 staff that have spent not less than five (5) years in the foreign exchange department and/ or the treasury department of twenty (20) banks in Nigeria out of the twenty one banks as at October 2013. The results showed that common currency had a positive impact on sustainable economic development (r = 0.193, p = 0.004). The study concluded that a common currency would improve bilateral trade because countries in the currency zone would not be engaged in exchange rates fluctuations and it will be easier to move monies from one country to the other in the zone without being scared of diversity in exchange values. The study recommended that regional trade policies should be made known to the general public as this will improve bilateral trade within ECOWAS community, the community should ensure equal pay and equal right for work of equal value, members should be encouraged to deal more with their local currencies instead of dollar as this will help improve trade in the region. It was also recommended that the community to address most of the issues of internal and external shocks before the commencement of common currency.
- Agyapong D. and Adam A.M. (2012)., Exchange Rate Behaviour: Implication for West African Monetary Zone., International Journal of Academic Research in Accounting, Finance and Management Sciences, 2(4), 215-228.
- BC Ross - Larson (2010)., Assessing Regional Integration in Africa., Economic Commission for Africa, Payment Systems and Intra- African Trade.
- Freetown (2008)., Review of ECOWAS exchange rate mechanism., Online at http://www.amao-wama.org/fr/Publications/Mecanisme%20de%20change%20en.pdf.
- Clark and John O.E. (1999)., Dictionary of banking and financial terms., Prospect Media, Sydney, 352.
- Szebeni K. (2009)., The effect of common currencies on trade., Online at http://uir.unisa.ac.za/bitstream/ handle/10500/1155/Dissertation.PDF?sequence=1.
- De Grauwe P (2003)., The Economics of monetary integration., Oxford University Press, Oxford, New York, 5th ed.
- Mundell R. (1961)., A Theory of Optimum Currency Area., American Economic Review, 51, 509-517
- Jimoh M.A. (2010)., Exploring the Role of Higher Education in Capacity Building and Sustainable Developement in Nigeria., East Africa Journal of Educational Research and Policy, 4.
- Ion R.A. (2011)., Monitoring sustainable agricultural development in Romania., Review of International Comparative Management, 12(5), 940-947.
- Zhang P. and London K. (2013)., Towards an internationalized sustainable industrial competitiveness model., Competitiveness Review: An International Business Journal, 23(2), 95-113.
- Pearce D., A. Markandya and E.B. Barbier (1989)., Blueprint for a Green Economy., Earthscan Publications Ltd., London.
- Stiglitz J.E., Sen A. and Fitoussi J.P. (2010)., Mismeasuring our lives: Why GDP doesn, The New Press.
- Van Rompuy H. (2012)., Towards a genuine economic and monetary union., European Council. Brüssel, 5.
- Alesina A., Barro R. and Tenreyro S. (2002)., Optimal Currency Areas., Harvard Institute of Economic Research Working Papers 1958, Harvard - Institute of Economic Research.
- Nitsch V. (2005)., Have a break, have a national currency: when do monetary unions fall apart?., P. De Grauwe and J. M´elitz (eds), Prospects for monetary unions after the Euro, The MIT Press, Cesifo Seminar Series, 319-345.
- Rose A. (2007)., Checking out: exits from currency unions., Journal of Financial Transformation, 19, 121-128.
- Farvaque E., Hammadou H. and Stanek P. (2011)., Selecting your inflation targeters: Background and performance of monetary policy committee members., German Economic Review, 12(2), 223-238.
- Kazandziska M. (2013)., Macroeconomic policy regimes in emerging market candidates for a currency union: the case of Latvia., Working Paper, No. 21/ 2013.) www.ipe-berlin.org/fileadmin/...paper/ipe_working_paper_21.pdf
- Oshikoya T.W. and Tarawalie A.B. (2010)., Sustainability of Fiscal Policy: The West African Monetary Zone (WAMZ) Experience., West African Monetary Institute, 9, 2.