European Economic Integration and the Franc Zone: The Future of the CFA Franc after 1999 Part II
"This research contemplates the likely scenarios that may be available to the CFA countries after 1999. Five different scenarios have been analysed. First is pegging the CFA to the euro by the two CFA zones or separately. The second option concerns a multi-currency pegging to the euro, US dollar and Japanese yen. This option is not for the very near future as some learning process to manage the adjustable peg to the euro is necessary. This seems the case for countries like Kenya and Zimbabwe. The third option is an ECOWAS-wide single currency. This choice, although desirable, needs more time to allow ECOWAS itself to become better organized, and existing institutions such as the West African Clearing House, now the West African Monetary Agency, to become operational. The fourth possible scenario, which is very undesirable, would be the creation of individual country currencies as a result of divergances among CFA countries. At a time of economic bloc-building, all necessary safeguards should be taken to overcome such a possibility. Finally, there has been talk about an African monetary fund that will clear the way for the creation of a continent-wide currency. This option is premature and the effort should be put into implementing one of the first three scenarios."