negotiating the path to eco: shouldn't human security concerns drive monetary integration of...

Multi-Disciplinary Journal of Research & Development Perspectives

Vol.1 No.2 December 2012 pp 181-194

Negotiating the Path to Eco: Shouldn’t Human Security concernsdrive Monetary Integration of ECOWAS?

by

Lere Amusan & Ademola Oluborode Jegede

Abstract

Monetary integration is a subject that has continued to dominatesocio-political discourse in the Economic Community of WestAfrican States (ECOWAS) axis. On one side, copious literatureexists showing that the ECOWAS does not meet with the traditionalcriteria of Optimal Currency Area (OCA). On the other, there isevidence to the fact that given a membership that encompassesmore than six million square kilometres, its population and aland mass larger than that of western Europe, the ECOWAS is apotential economic axis. Yet, monetary integration in the Westpart of Africa remains difficult considering the politicaldynamics which efforts towards the Eco have generated. This paperargues, in the main, that monetary integration matters to humansecurity, and that the need to safeguard human security should bea great incentive for monetary unification by the ECOWAS. Hence,ECOWAS must effectively allow human security concerns of the sub-region to guide its path towards monetary integration.

Key words: Eco, human security, unification, ECOWAS

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Introduction

Monetary integration is a subject that has continued to dominatesocio-political discourse in the Economic Community of WestAfrican States (ECOWAS) axis. For several reasons, not least ofwhich are expansion of market and increased participation in theglobal market, monetary integration is a necessity.1 As Nwanaargues, monetary integration at the sub regional levels iscrucial to the ultimate goal of Africa’s monetary integration.2

Although, monetary integration of Africa, observes Nwana, doesnot satisfy the traditional Optimal Currency Areas (OCAT),3 theEconomic community of West African States (ECOWAS) is bothpotentially and substantially an economic zone. As Edi argues,this is particularly so considering its land mass,4 and itspopulation of about 236 million people, contends, Asante.5

Established on 28th May 1975 in Lagos by 16 countries in WestAfrica, The Treaty establishing the ECOWAS came into force onJune 10, 1975 when seven countries ratified it. The aim of the1Oyejide, T.A.1998. “Global Economic Through Multilateral Negotiations: Africa in the World Trade Organization”, mimeo, AERC, Nairobi2 Nwana OJ (2006) Economic and Monetary Integration in Africa, *Presented at the G24 meeting in Singapore, onSeptember 14, 2006 2-63 (n 2 above) 34 Edi E (2007) Globalisation and Politics in the Economic Community of West African States. Durham: Carolina Academic Press5 Asante, R.D., Masson, Paul Robert and Jacqueline living.2001. ‘The Pros and Cons of Expanded Monetary Union in Africa.’ Finance and Development 38(1): 24-28

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Community is “to promote co-operation and development in allfields of economic activity, particularly in the field ofindustry, transport telecommunications, energy, agriculture,natural resources, commerce, monetary and financial questions andin all social and cultural matters for the purpose of raising thestandard of living of its peoples, of increasing and maintainingeconomic stability, of fostering closer relations among itsmembers and of contributing to the progress and development ofthe African Continent”.

The mandate given to ECOWAS under its Treaty was as follows: theelimination of customs duties and other charges of equivalenteffect in respect of the importation and exportation of goodsbetween member states; the abolition of quantitative andadministrative restrictions on trade among the member states; theestablishment of a common external tariff and a common commercialpolicy towards third countries; the removal of obstacles to thefree movement of persons, services and capital; the harmonisationof agricultural policies and the promotion of common projectsnotably in the fields of marketing, research and agro-industrialenterprises; development of joint transport, communication,energy and other infrastructural facilities as well as theevolution of a common policy in these fields; the establishmentof a Fund for Cooperation and Development; and such otheractivities that could further the aims of the Community as mayfrom time to time be undertaken in common by member states.

As Nwana rightly argues, the Treaty adopted the classical modelof economic integration, envisaging the establishment of aneconomic community through a gradual process of tariffelimination leading to the establishment of a free trade area, acustoms union and a common market. In support of the integrationprocess various cooperation instruments such as the customsautomation project (ASYCUDA) to improve the collection of customsrevenue, the common ECOWAS passport in addition to the ECOWAS

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travellers Cheque, the introduction of the third party insurancescheme for cross border vehicles known as the brown card.6

Although monetary integration was part of ECOWAS Agenda frominception, Nwana explains further, it was only in 1987 that theECOWAS Monetary Co-operation Programme (EMCP) was mainstreamed inthe core ECOWAS mandate.7 Evidently, if viewed in the context ofits mandate, monetary integration will help in facilitating thepromotion of cooperation and development in all fields ofeconomic activities. However, the performance of the Programmeafter two decades has been poor, resulting in numerouspostponements of the date of commencement of the envisagedmonetary union, required for the use of the Eco. So far, what isthe historical trajectory of monetary integration among theECOWAS? How well does this trajectory fit the traditional OCATfeatures?

A leading component in the mandate of ECOWAS is the promotion ofcooperation and development, both aimed at the purpose of raisingthe standard of living of its peoples. Can this be equalised withthe promotion of human security? To what extent can the path tomonetary integration be driven by human security? In other wordshow does the human security link up to the monetary integrationdebate? This paper attempts to answer these questions and arguesin the main that the need for promotion of human security in theECOWAS sub region is a further incentive for monetary integrationin the ECOWAS axis.

Historical Trajectory of Monetary Integration in the ECOWAS: Sofar so what?

Monetary integration, at least its concept, is not new to theWest African history. Remarkably, it featured in the traditionalhistory of various empires within the then West African region6 ( n 2 above) 157 As above

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including, the Ghana Empire, Bornu Kingdom, Oyo Empire andSonghai Empire. At that period in history, same means of exchangewas arguably employed for trade transactions. Also before theestablishment of African regional and sub-regional bodies somecountries such as Senegal and Gambia have attempted the idea ofpolitical unification with no less implication for currencyunification in between. This however never worked out.8

In establishing the Economic Community of West African States(ECOWAS) in 1975, the Authority of Heads of State and Governmentof the Economic Community of West African States (ECOWAS)conceived that future monetary integration is feasible, whichconception led to the creation of the West African Clearing House(WACH) as a payment mechanism to facilitate intra-regional tradewithin the sub-region. In 1986 WACH was restructured andmetamorphosed into the West African Monetary Agency (WAMA) withan expanded mandate of promoting trade liberalization andmonetary cooperation. In addition, WAMA is expected to ensure theestablishment of a single monetary zone by creating the necessaryconditions leading to the implementation of uniform monetarypolicy and creation of a single currency.

In furtherance of the monetary integration initiatives, theAuthority of Heads of State and Government at the Abuja (Nigeria)Summit in 1987 adopted the ECOWAS Monetary Cooperation Programme(EMCP). The main objective is to achieve a harmonised monetarysystem by 2000 through the observance of a set of macroeconomicconvergence criteria that would ultimately result in thestrengthening of the economies of member states.9

The first effort at monetary union crystallized in the formationof the Union Monetaire I’ovest Africaine (UMOA) countries madeup of Benin, Togo, Cote d'Ivoire, Niger, Mauritania, Senegal,

8 Edozien, E. C. and Osagie, E. 1982. “Problems and Prospects for Monetary Integration in West Africa.” Edozie, E.C and Osagie, E. (eds.). Economic Integration of West Africa. Ibadan: Ibadan University Press.9 (n 2 above) 15

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Burkina Faso, and Mali, although as it turned out, Mauritania andLiberia were not part of the arrangement. This was followed bythe April 2000 Accra Declaration in which five countries namelyThe Gambia, Ghana, Nigeria, Guinea and Sierra Leone agreed toform a second monetary zone, the West African second MonetaryZone (WAMZ), by 2004 which would later merge with the UEMOA toform the West African Monetary Union in 2005. The essence of theWAMZ is to ensure the emergence of only two currencies (in theplace of current eight currencies) in the sub-region as it willbe easier to merge the two currencies into one.10

Of importance in the setting up of WAMU is to take advantages ofa common currency such as lower inflationary rate, stability inthe economy and economic of scale with less cost in investmenttransactions among the member states. Thus a West Africa currencyunion would reduce dependence on the EU in the francophone statesand remove foreign exchange control regulations which distortforeign exchange market in the Anglophone states. Some of theconvergence criteria set up by the member states are:

a. A single digit inflation rate by year 2000 and 5% rate byyear 2003.

b. The budget deficit (excluding grants) to GDP ratio of notmore than 5% by year 2000 and 4% by year 2002.

c. The Central Bank financing of budget deficit should belimited to 10% of previous year’s tax revenue; and a maximumbudget deficit to GDP ratio of 5% by the end of 2000 and 4%by the end of 2003.

d. Gross external reserve of a member state should cover atleast three months of imports by end of year 2000 and sixmonths by end of year 2003.

In actualising a currency union for the sub-region and based onthe observation of the above listed criteria, a single currency,

10 International Monetary Fund (2003) West African Economic and Monetary Union: Recent Economic Developments and Regional Policy Issues; and Public Information Notice on theExecutive Board Discussion

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Eco, was to commence in 2003. Because no state, except, perhapsNigeria and the Gambia, met the criteria and this led to thepostponement of the introduction of a unified currency to 1st

July 2005 by the Authority of Heads of State and Governments.Since the convergence criteria are yet to be met by the memberstates of WAMZ and WAEMU. With this development, the date wasshifted to on or before 2015.11

However the attitude of the francophone has been a majorchallenge to monetary integration of ECOWAS. The French speakingstates of the members are of the view that their perfectfinancial arrangement with Paris government since 1945 continuesto serve their economic interest. With the main fear thatconsenting to The Eco regime is a step backward from economicdevelopment, the francophone are less enthusiastic about acurrency integration that will mean their relinquishing of theireconomic and cultural affiliation to Paris.12

In similar vein small states in the ECOWAS are suspicious of‘big brother Nigeria’ and indeed other super powers in theregion, for their potentials to usurp the monetary system to thedetriment of others. Also there is the suspicion even in bignations such as Nigeria that her less endowed neighbours wouldtake advantage of the size of the Nigerian market to share in her‘growing wealth and world influence’.13 It is true though thatthe recent international economic configuration that is tendingtowards the creation of a currency union makes Nigeria to thinkthat it stands to benefit the more in the new internationalsupranational financial institution if eventually created.However, notwithstanding the foregoing, countries like the Gambiaand Sierra Leone with “money that nobody else wanted to bother

11 Amusan L Politics of Currency Unificaation in the ECOWAS Sub-region: A Sisyphean Adventure? 1512 As above13 Edozien, E. C. and Osagie, E. 1982. “Problems and Prospects for Monetary Integrationin West Africa.” Edozie, E.C and Osagie, E. (eds.). Economic Integration of West Africa. Ibadan: Ibadan University Press. 140-42

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with, wanted to have a currency that had some clout in theworld...and at the sub-regional level.14

Thus although under the ECOWAS treaty, it was envisaged that the16 member-nations would form a common market and eventualcurrency union after fifteen years of its existence,15 thisremains elusive and the reality is that ECOWAS is yet to set up acurrency union to catch up with the demand of the globalizedinternational system where regional integration continue to bethe new order.

Does the trajectory for monetary integration in ECOWAS fit intoOCAT?

The theory of optimal currency areas (OCA), as inspired by theworks of Friedman,16 and Meade, but reformulated through thesubstantial contributions of McKinnon,17 Mundell,18 and Kenen inthe 1960’s, is a useful starting point for any discussion onmonetary integration. It addresses the central question ofwhether a monetary union should be pursued. Mundell defines theOCA as a region in which factors of production are internallymobile but internationally immobile, so as to facilitate theintraregional redistribution of resources in response to demandshifts.19

Mundell’s theory on OCA teaches that a group of countries willbenefit from using a common currency, provided three conditionsare in place: 1) the countries involved should not be hit by

14 Reid, T. R. 2004. The United States of Europe: The Superpower Nobody talks about- from the euro to Eurovision. London: Penguin. 6615 (n 13 above) 134-516 Friedman, M. (1953), Essays in Positive Economics, University of Chicago Press, Chicago.17 McKinnon, R. (1963), Optimum currency areas.American Economic Review, vol. 52.18 Mundell, R.A. (1961), A theory of optimum currency areas. American Economic Review, vol. 5119 As above

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asymmetric shocks; 2) there is a high degree of labor mobilityand/or wage flexibility among them and 3) there is a centralizedfiscal policy in place to redistribute financial or otherresources. By going deeper into the economic analysis of OCA,several new criteria became apparent. In its different versions,the theory on OCA emphasizes several criteria (structuralcharacteristics like size, openness, export structure, productionstructure, labor mobility, price and wage flexibility) of aneconomy to define the optimality. Later on, additional criteriaon similarity of shocks and monetary transmission mechanisms havebeen taken into consideration. The criteria are still central inthe debate on monetary integration.

For instance, McKinnon,20 expands the theory of OCA andincorporated the trade factors. By demonstrating the influence ofopenness in a currency area, he opined that considerations of acountry’s trade behaviour are essential in determiningoptimality. Specifically, he noted that “if we move across thespectrum from closed to open economies, flexible exchange ratesbecome both less effective as a control device for externalbalance and more damaging to internal price-level stability”. Onthe issue of financial credibility, he underscored the importanceof liquidity where capital accumulation depends on confidence inthe domestic currency. Alluding to the common currency ofAmerica’s fifty states as an example, he noted that small areasare more in need of a fixed exchange rate to assure thatindividual currencies remain liquid, particularly in cases whereintra-regional trade is extensive.

On the other hand, Kenen,21 opined that diversification should bea larger concern than labour mobility. He noted that homogeneityis not always optimal since a country with a fixed currency would

20 (n 17 above)21 Kenen, P. 1969. “The Theory of Optimum Currency Areas: An Eclectic View,” in Robert A. Mundell and Alexander K. Swoboda, eds., Monetary Problems of the International Economy. Chicago: The University of Chicago Press:

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better withstand asymmetric shocks provided her economy isdiversified and depended on more than one commodity for revenuebase. Frankel and Rose,22 introduced the notion of endogeneity.They submitted that a group of countries that does not qualify asan OCA ex ante, may evolve into one expost, by virtue of adopting acommon currency. They contended that countries with closer tradelinks tend to have more tightly correlated business cycles andthus, would converge towards the ideal conditions for monetaryintegration. McKinnon23 revisited the issue of homogeneity andargues for intra-regional diversification as a safeguard toeconomic shock, particularly for specialized economies. Ineffect, heterogeneity offers a risk-sharing arrangement withinwhich a homogenous country with a specialized economy benefitsfrom monetary union with countries that have a different revenuebase. Thus, when one member suffers an economic shock, others areunhurt and can provide temporary assistance to the needy country.McKinnon24 concludes that there are only two compelling reasonsfor any country not to enter into monetary union with its tradingpartners: fragile public finances and unstable monetary model.

De Grauwe25 enumerated the potential benefits of adopting acommon currency and restated that strong trade relations are aprecondition for a successful currency union. Furthermore, hefocused on the advantages of reducing instability. He concludedthat Mundell’s criteria were basically restrictive as it ignoresthe important prospective benefits of monetary integration thatput the costs into focus. Indeed, Grauwe26 findings laid thefoundation for a more inclusive understanding of OCAs which hasinfluenced the direction of contemporary researches.

22 Frankel, J. A. and A. Rose. 2002. “An Estimate of the Effect of Common Currencies onTrade and Income.” Quarterly Journal of Economics, May 117(2)23 McKinnon, R. I. 2004. “Optimum Currency Areas and Key Currencies: Mundell I versus Mundell II.” Journal of Common Market Studies, Special Issue November 42(4)24 As above25 De Grauwe, Paul. 2000. Economics of Monetary Union. Oxford: Oxford University Press.26 De Grauwe, Paul. 2000. Economics of Monetary Union. Oxford: Oxford University Press.

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Rose,27 Engel and Rose28 as well as Frankel and Rose29 havegenerated a substantial literature on the relationship betweencurrency integration and intraregional trade. The conclusion ofthese studies is that the use of a common currency increasestrade threefold. Several other studies have examined the impactof monetary union on fiscal policies, based on the theory ofcredible commitment. The consensus is that budget discipline andstrict compliance to convergence criteria must accompany anyfuture plans of monetary union in order to ensure success.Collier30 posited the theory of ‘agencies of restraint’ toregulate governments in African countries. Guillaume andStasavage31 argue that governments can demonstrate theircredibility by voluntarily restraining themselves on the issuesof monetary intervention and instead, choose a fixed exchangerate regime. Masson and Pattillo,32 stressed that monetary unioncould create policy credibility only where countries developadequate infrastructure to constrain government behaviour andimpose and monitor compliance.

27Rose, A. K. 2000. “One Money, One Market: The Effect of Common Currencies on Trade.” Economic Policy, April 30: 28 Engel, C. and A. Rose. 2002. “Currency Unions and International Integration.” Journal ofMoney, Credit, and Banking, November 34(4):29 Frankel, J. A. and A. Rose. 2002. “An Estimate of the Effect of Common Currencies onTrade and Income.” Quarterly Journal of Economics, May 117(2)30 Collier, P. 1998. “Globalization: Implications for Africa,” in Z. Igbal and M. S Khan (ed),Trade Reform and Regional Integration in Africa, IMF, Washington, D.C31 Guillaume, D. M. and D. Stasavage. 2000. “Improving Policy Credibility: Is There a Case for African Monetary Unions?” World Development, August 28(8): Guillaumont, P., andP. Plane. 1988. “Participating in African Monetary Unions – An Alternative Evaluation.” World Development, May 16(5)32 Masson, Paul, and Catherine Pattilo, 2001, Monetary Union in West Africa (ECOWAS) – Is it Desirable and How could it be Archieved? Ocassional Paper No. 204 (Washington International Monetary Fund)

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Guillaumont and Plane33 analyzed the effects of CFA participationon policy formation in member states by controlling for theeffects of exogenous influences such as resource allocations andpolitical influences and concluded that monetary integration inthe CFA Zone benefited participating countries. Guillaume andStasavage34 stated that the advantages of monetary integrationwere not restricted to CFA countries. The authors compared theZone with other African monetary unions and concluded thatmembership in other common currency areas offered comparablebenefits. For example, members of the Rand Monetary Areaexperienced high levels of growth and investment as well as lowinflation rates in the period 1974-1993.

However, as Xavier Debrun, Masson, Paul, and Catherine Pattilohave shown, the net gains from joining a monetary union depend oncorrelation of their shocks with other members differences infiscal policy distortions and beggar- thy-neighbour nationalmonetary policies operating through the strength of tradelinkages.35 In terms of the asymmetry nature of shocks, thereare differences in the size of the shocks facing differentcountries in the ECOWAS, Nigeria and the Gambia have the largeststandard deviation of terms of trade changes. Together withGuinea and Niger, these two countries are each dependent on asingle commodity for 50 percent or more of their export earnings.Another feature of the shock is that the shock to the terms oftrade of ECOWAS countries is typically not well coordinated. Thisis due largely to differences in commodity exports, and the factthat the world pries of the various commodities do not movetogether, Nigeria is substantial oil exporter, while most of theother countries of the region are net oil importers.36

33 Guillaumont, P., and P.Plane. 1988. “Participating in African Monetary Unions – An Alternative Evaluation.”World Development, May 16(5)34 Guillaume, D. M. and D. Stasavage. 2000. “Improving Policy Credibility: Is There a Case forAfrican Monetary Unions?” World Development, August 28(8):35 Xavier Debrun, Masson, Paul, and Catherine Pattilo Monetray Union in West Africa: Who Might Gain, Who might Lose, and Why? (IMF Working Paper 2002) 1236 (n 32 above)

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In terms of the efficiency of government spending, Masson andPattilo have further argued that using corruption index as astandard of measurement, there is large difference in corruptionscores across the ECOWAS countries, with Niger and Nigeriascoring the worst on corruption and The Gambia scoring the best..In their further view, the corruption index suggests a varyinglevel that is higher than socially optimal across the ECOWAScountries,37 signifying that efficiency of government spending isa challenge even so as the political affiliation to colonialmasters.

Also, the size differences across the countries influence the netgains to forming alternative monetary union, considering that thepolitical influence on the central bank is proportional to therelative economic size of the member states. For instance,Nigeria is the dominant economy, with over half the populationand 40% of the GDP of ECOWAS and close to 70% of the GDP of theWAMZ countries proposing a second monetary union. The secondlargest country, Ivory Coast, represents 17% of a monetary unionof the ECOWAS countries, at the other end of the scale. TheGambia would constitute less than 1 percent.38 Consequently,ECOWAS countries, as rightly argued by some writers do not fallwithin the traditional OCAT structure.39

However, the driver of the monetary integration debate forECOWAS, as shown in the foregoing analysis has been mostlyanalysed from the economic platform. Therefore it merits someconsideration in this paper the question as to what extent canhuman security be engaged in driving the monetary integrationagenda.

37 (n 35 above)38 (n 35 above) 1339 See Masson, Paul, and Catherine Pattilo, 2001, Monetary Union in West Africa (ECOWAS) – Is it Desirable and How could it be Archieved? Ocassional Paper No. 204 (Washington International Monetary Fund); Edozien, E. C. and Osagie, E. 1982. “Problems and Prospects for Monetary Integration in West Africa.” Edozie, E.C and Osagie, E. (eds.). Economic Integration of West Africa. Ibadan: Ibadan University Press. 140-42

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Human Security angle to Monetary Integration in EconomicCommunity of West African States (ECOWAS)

Human security began to matter in relation to economic andpolitical development during the early 1990s, when it would seemthat almost a universal consensus was reached on the need tobroaden the concept of security, taking into account thepolitical context at the end of the Cold War. It was in a similarcontext that stronger collaboration also became possible betweendevelopment, foreign policy and defence institutions withingovernments which thus helped in providing a new basis forNorth/South relations.40

Amartya Sen develops this concept in more detail, recalling thathuman security is a fundamental part of broader developmentprocesses, integrally connected with securing human capabilities,i.e. “the various combinations of functioning (beings and doings)that the person can achieve. […] A set of vectors of functioning,reflecting the person’s freedom to lead one type of life oranother[…] to choose from possible livings.”41 In his furtherview, the following distinct elements lie at the core of thehuman security concept:

A clear focus on individual human lives (in contrast tostate security models)

An appreciation of the role of society and socialarrangements in making human lives more secure in aconstructive way

40 See A. Suhrke, 1999, “Human Security and the Interests of States” in Security Dialogue, Vol. 30, No. 3, pp. 265–276.41 Quoted in S. Alkire, “The Capability Approach and Human Development”, September, 9th2002,http://hdr.undp.org/docs/training/oxford/presentations/Alkire_HD%20and%20Capabilities.pdf . See also A. Sen,1989, “Development as capabilities expansion” in the Journal of Development Planning.

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A reasoned concentration on the downside risks to humanlives42

A choice to focus on the ‘downside’ – emphasising the morebasic human rights.

Thus, the ‘human security’ approach argues that threats andchallenges to security transcend national defence, and law andorder to encompass all political, economic and social issues thatguarantee a life free from risk and fear. Hence, the focus hasshifted from the State to the security of persons; even thoughboth are not mutually exclusive. Security can be thought of as a“public good”, responding to the strategic need to supportsustainable human development at the same time as promotingnational, regional and global peace and stability.

There are two main contemporary theories of internationalrelations that can be used to conceptualize human security. Atone end of the continuum is an approach based on a neo-realisttheoretical framework, which maintains a continued emphasis onthe primacy of the state within a broadened conceptualization of(human) security. Some call this approach the ‘new securitythinking’43 A postmodernist or ‘critical human security’ approachthat is rooted within the pluralist theory of internationalpolitics represents the other end in this security discourse.This approach is based on a set of assumptions that essentiallyattempt to dislodge the state as the primary referent ofsecurity, while placing greater emphasis on the interdependencyand transnationalization of non-state actors.

42 ‘Downside risks’ means a clear focus on immediate threats that menace survival, thecontinuation of daily life and the dignity of human beings. This requires protectionof people from pervasive threats such as conflict, deprivation, extreme poverty, etc.See Hussein, K, Gnisci D, and Wanjiru J ‘ Security and Human Security: AnOverview of Concepts and Initiatives , what implications for West Africa?SAH/D(2004)547 December 2004 1343 Thompson, L. 2000. Theoretical Approaches to Security and Development. ISS Monograph No. 50.

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The neo-realist approach to human security has been advocated by‘structural’ or neo-realists such as Barry Buzan, who argues thatthe ‘straitjacket’ militaristic approach to security thatdominated the discourse during the Cold War was ‘simpleminded’and led to the underdevelopment of the concept.44 He subsequentlybroadens it to include political, economic, social andenvironmental threats, in addition to those that aremilitaristic.45 Although Buzan examines security from the threeperspectives of the international system, the state, and theindividual, he concludes that the most important and effectiveprovider of security should remain the sovereign state. Hisanalysis provides the most extensive contemporary examinationavailable of human security from a state combined perspective.

The ‘critical’ or postmodernist approach to human security,reflected in the work of Ken Booth, also advocates a broadenedconceptualization of security that goes beyond a militarydetermination of threats.46 But advocates of the postmodernistapproach stress quite explicitly that the state must be dislodgedas the primary referent of (human) security, and encompassinstead a wide range of non-state actors, such as individuals,ethnic and cultural groups, regional economic blocs,multinational corporations (MNCs) and nongovernmentalorganizations (NGOs), and just about all humankind. In expandingthe concept of security horizontally and vertically, Booth arguesthat human security is ultimately more important than statesecurity.47 Put differently, the postmodernist conceptualizationof security does not equate state security with human security.

In Booth’s view, states and implicitly governments must no longerbe the primary referents of security because governments which44 Buzan, B. 1991. New Patterns of Global Security in the 21th Century. International Affairs Vol. 67, No. 3, pp. 431-451.45 As above46Booth, K. 1994. A Security Regime in Southern Africa: Theoretical Considerations. Southern African Perspectives No. 30, CSAS. Booth 447 (n 46 above)

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are supposed to be ‘the guardians of “their peoples’ security”,have instead become the primary source of insecurity for the manypeople who live under their sovereignty, rather than the armedforces of a neighbouring country’.48 This approach challenges theidea of a state as an effective and adequate provider of securityto its people. State security, argues Booth, was used by‘governments that posed as guardians of their peoples’ security,to cloak reality and hide what essentially was the security oftheir regime and its supporters and should therefore be dislodgedas a primary referent of security’.49 Thus the neo-realistapproach to security places human security ‘alongside statesecurity as a twin referent in the theory and practice ofsecurity’.50

On the other hand, in equating state and human security, Buzanmakes reference to ‘the fate of human collectivities’ as beingthe primary object or referent of security.51‘ Humancollectivities’ are the citizens of a state. The state becomesthe referent of security as the representative institution ofhuman collectivities. In so far as Booth and Buzan conception ofhuman security focuses on the non military threat to humansecurity, they at least agree with key reasons behind the callfor integration. In all, generally, some steps are commonly indicated as essentialto the construction of human security: a) the promotion ofdevelopment, emphasizing fairness, sustainability, and popularparticipation; b) commitment with peace as a means to amplify thehuman security agenda; c) new North-South agreements based onfairness, and not on charity, emphasizing the global distributionof opportunities and the economic organization; d) equal accessfor goods from developing countries to the world markets, and the

48 (n 46 above) 549 (n 46 above) 4-5.50 (n 46 above) 3.51 Buzan, B. 1992. People, States and Fear: An Agenda for International Security Studies in the Post-Cold War Era. New York: HarvesterWheatsheaf.

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reduction of barriers to free trade; e) reform of internationalinstitutions, specially the IMF, the World Bank, and UN; and f)increase the role of civil society. Thus, the promotion of humansecurity demands fairness, sustainability, democratization, andsocial participation in all decision levels. Key Human Security challenges of the ECOWAS region in the lensof Monetary Integration

In the ECOWAS axis, certain human insecurity factors can behighlighted. The argument put forward in this session is thatbeing crucial to trade and development, monetary integration willhelp in addressing the threats that menace survival, thecontinuation of daily life and the dignity of human beings, aswell as help in protecting people from pervasive threats such asconflict, deprivation, extreme poverty. These are brieflydescribed and demonstrated below by highlighting the place ofmonetary integration in selected human security concerns inECOWAS axis.

Poverty – The UNCTAD in its 2002 report, defined generalisedpoverty as “a situation in which a major part of the populationlives at or below income levels sufficient to meet their basicneeds and in which the available resources in the economy, evenwhen equally distributed, are barely sufficient to cater for thebasic needs of the population on a sustainable basis”. 52

Largely consisting of low income countries, West Africa remainsbedridden with poverty, a threat to security and one of the mainunderlying causes of conflicts, poverty remains a challenge inthe sub-Saharan Africa.53 It is the primary index ofunderdevelopment, the root cause of conflict and violence.54 In

52 UNCTAD (2002) The Least Developed Countries Report 2002. Escaping the Poverty Trap. United Nations, Geneva. 3953 AD Oduro and I Aryee Investigating Growing Poverty In West Africa CPRC Working PaperNo 28April 2003 1. 54 World Bank, ‘Accelerated Development in Sub-Saharan Africa: an Agenda for Action’, Washington DC, World Bank, 1981; Organisation of African Unity (OAU), The Lagos Plan

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flow of trade and investments positively impact on poverty inthat, when trade becomes less hindered, the income and purchasingpower of individuals increase and consequently, their standard ofliving. Hence, monetary integration will ultimately help inaddressing the pervasive poverty that menace ECOWAS memberstates.

Natural Resources: While West Africa possesses a rich naturalresource base, weak institutions, poor management, politicalinstability and some of the world’s highest levels of corruptionconsistently undermine efforts to put the region’s resources towork for the good of its people.55Although they potentiallyrepresent financial windfalls, natural resources in Africa arethe object of greed. Even though they constitute great assets,they paradoxically often threaten the stability of countries.Major reason for sovereign claim in most West African countriesis often in order to hold tight to power and control theseresources. Yet if resources are well managed, they are capable ofproviding for its entire population.56Arguably, natural resourcesabound in the West African region but are not evenly distributedamong the ECOWAS member states. In some nations such as Liberiaand Sierraleone, they have been objects of ‘bloody trade’ andplayed centre role in the ravaging wars in which they wereembroiled. Monetary integration, particularly when supported withappropriate trade policies will help in bridging the gap betweenthe nations that are less endowed in natural resources and thosenations where natural resources abide. This in effect will makethe importance of the natural resources found in the region moremeaningful not only to the citizens of the member states, where

of Action for the Implementation of the Monrovia Strategy for the Economic Developmentof Africa, adopted by the Second Extraordinary Assembly of the OAU Heads of State and Government Devoted to Economic Matters, Lagos, Nigeria, 28-29 April, 1980; The AfricanUnion (AU) Strategic Report of the African Commission 2004.55 http://webcache.googleusercontent.com/search?q=cache:pS-0vuhMUroJ:www.usaid.gov/locations/sub-saharan_africa/countries/warp/+natural+resources+and+instability+in+West+Africa&cd=2&hl=en&ct=clnk&gl=ng56 A O Ong’ayo Political instability in Africa Where the problem lies and alternative perspectives http://www.diaspora-centre.org/DOCS/Political_Instabil.pdf 2

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they are found, but also beneficial to other member states not sorichly endowed.

Migration: The citizens from West Africa are among the world’smost mobile populations. Population censuses indicate that theregion’s countries now harbour approximately 7.5 million migrantsfrom other West African countries – almost 3% of the regionalpopulation. Establishing a link between migration and developmentis one of the objectives of ECOWAS.57 Towards this end, TheECOWAS Commission was provided with the mandate to define a jointregional approach on migration at the 30th Ordinary ECOWAS Headsof State and Government Summit in Abuja in June 2006. At themeeting in Ouagadougou on 20 December 2006, the ECOWAS Mediationand Security Council reaffirmed this priority, requesting theCommission President to: “pursue the consultative process for the definition ofa common approach to the management of intra-regional migration and migration toEurope in all its aspects”. Since then, the ECOWAS Commission hasinitiated a strategic thinking process with a view to defining ajoint regional approach on migration.58 However, without beingcomplemented by monetary integration, the prosperityopportunities which mobility bring may not be fully harnessed, asirregular migration involving this economic zone may continuewithout check.

Internal conflicts and their spread to neighbouring countries-One of the greatest challenges facing Economic Community of WestAfrican States (ECOWAS) is how to contain and resolve violentconflicts, and forestall the outbreak of new ones. In the lasttwo decades, Liberia, Sierra Leone, Cote d'Ivoire and GuineaBissau have been embroiled in civil conflicts including thosecaused by coup d’etats that have resulted in mass murder, massivecross-border refugees and arms flow, internal displacement andother degrading forms of treatment to the population.59 The57 A Common West African Approach to Migration http://www.oecd.org/document/7/0,3343,en_38233741_38246954_38483911_1_1_1_1,00.html58 (n 57 above)59 United Nations, Secretary-General’s Report to the United Nations Security Council, New York United Nations, September 1988; also see JJ Hewitt, J Wilkenfeld and TR Gurr

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challenge of articulating collective security arrangements tostop the conflicts and coup d’états has, therefore, engaged theminds of West African leaders for many years, leading tointerventions as it was the case in Liberia and Sierraleone andthe establishment of the Ecowas Cease Fire Monitoring Group(ECOMOG). Although the causes of conflict is multi-faceted,conflict is more likely to be reduced where commerce booms andindividual finds activities that engage their energiesproductively. In facilitating free flow of trade, monetaryintegration is a key , although indirect measure that may helpreduce incidence of conflict. The proliferation of small arms: Small arms are produced in Ghanaand Burkina Faso and then sold cheaply. Efforts have been made tocontrol small arms production at the regional level. A regionalConvention on Small Arms has been signed by ECOWAS member Statesto regulate arms production, importation and exportation withinthe ECOWAS zone. Similarly, the negative impact of cross‐bordercrimes linked to drug trafficking, human trafficking, andterrorism are as crucial as proliferation of small arms. Thoseinvolved these trades enjoin a strong network of institutionsand capital flow which make the trade easier to carry out. Thefactor of uniformity which monetary integration brings to thetable may allow for more means of tracking the funds of thoseengaged in the nefarious trade, and in so doing help inaddressing the security concerns posed by trade in small arms,drug and human trafficking, and terrorism.

In addition to the foregoing, generally, the mandate given toECOWAS under its Treaty was as follows: the elimination ofcustoms duties and other charges of equivalent effect in respectof the importation and exportation of goods between memberstates; the abolition of quantitative and administrativerestrictions on trade among the member states; the establishmentof a common external tariff and a common commercial policy(2008) Peace and security 2008.

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towards third countries; the removal of obstacles to the freemovement of persons, services and capital; the harmonisation ofagricultural policies and the promotion of common projectsnotably in the fields of marketing, research and agro-industrialenterprises; development of joint transport, communication,energy and other infrastructural facilities as well as theevolution of a common policy in these fields; the establishmentof a Fund for Cooperation and Development; and such otheractivities that could further the aims of the Community as mayfrom time to time be undertaken in common by member states. Thiscreates the environment in which monetary integration is expectedto thrive.

Human security points towards the necessity of wealthdistribution and reinforcement of democracy, something whichmonetary integration will ultimately help in achieving. On closerlook at the Treaty establishing the ECOWAS, it is apparent thatthe aim of the Community is “to promote co-operation anddevelopment in all fields of economic activity,... for thepurpose of raising the standard of living of its peoples, ofincreasing and maintaining economic stability, of fosteringcloser relations among its members and of contributing to theprogress and development of the African Continent”. This agreeswith the human security and monetary integration hypothesis,something further explained below.

Trade is the lynchpin to creating a common currency area, becausetrade integration creates the trans-national political andeconomic infrastructure required for an effective monetary union.Economic theory demonstrates that trade liberalization, whetherin multilateral or regional scope, brings multiple benefitsincluding economic development, and improved standard of livingof the individual. This is particularly so when supported withappropriate policy on wealth distribution. As De Grauwe hasmentioned, adopting a common currency strengthen strong traderelations.60 Comparing the CFA zone with other African monetary60 (n 26 above)

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union, Guillaume and Stasavage also concluded that membership inother common currency areas offered comparable benefits. Forexample, members of the Rand Monetary Area experienced highlevels of growth and investment as well as low inflation rates inthe period 1974-1993.61

In further reinforcing the foregoing, Oyejide notes that thepotential benefits of trade liberalization and integration forAfrican countries are ingrained in the theory of economies ofscale. The small size of most sub Saharan economies points tounification as a useful means of expanding markets and increasingparticipation in the global economy. As he argues, a relaxationof trade restrictions within a given region could reduce internaltransport costs, stimulate intraregional trade, and ultimatelyincrease the growth and productivity of member states.62

The concept of human security may be understood in thisenvironment, since its scope reflects the connection of manyelements, such as: the reinforcement of human rights, thestrengthening of democratic institutions, the elimination ofsocial inequalities, environmental concerns, the attention to thespreading of knowledge and technology as a means to reduceeconomic inequalities, the concerns about globalization and itssocial implications, and the discernment on the world financialdimension. In economic terms, in some way, monetary integrationfacilitates resource allocation in an enlarged market, implicatesthe growth of investment capacity, stimulate competition, andproduction of quality.

Also, the construction of human security demands social resources(mobilization), economic financing, and political will for itsimplementation. It is therefore hardly imaginable that these willbe easy to achieve where individual nation under ECOWAS sticks tothe concept of monetary sovereignty, with governments controllinglocal interest and exchange rates in blissful disdain to the61 (n 34 above)62 (n 1 above)

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trend of the rest of the world, as they do presently. In theinterest of human security, Governments within the ECOWAS mustlet go of the fatal notion that nationhood requires them to makeand control the money used in their territory.

The question as to sovereignty has been diminished in respect ofmanagement of conflict situation in West Africa, and the questiontherefore is why this should remain problematic in the case ofmonetary integration. For instance, ECOWAS has considerablyimproved its responsiveness to conflict and has become the keyplayer enhancing peace and security in West Africa, as proven bythe ongoing mission in Côte d’Ivoire. The Secretariat hasprogressively taken more important initiatives to tackle securitychallenges faced by West African populations and obtainedconsistent international support to build its capacities in thisarea. The focus of ECOWAS initiatives on security hasprogressively begun to address dimensions of human securitybeyond physical violence. Unlike the non-intervention clauses ofthe UN and OAU charters, ECOWAS is compelled to intervene inarmed conflict within one of its member states if the conflict islikely to endanger peace and security in the entire Community.63

Following this principle, West Africa was the first in thecontinent to establish a regional military peacekeepingintervention (i.e. Liberia, in 1990).64 In the absence of aresponse from the international community to massive violationsof human rights in Liberia at the end of 1989, the ECOWASCeasefire Monitoring Group (ECOMOG)65 intervened in the countryand successfully supervised the presidential elections in July63 Chapter 4, Protocol on Mutual Assistance on Defence,www.iss.co.za/AF/RegOrg/unity_to_union/pdfs/ecowas/13ProtMutualDefAss.pdf64 A. Sesay, 1999, ECOMOG and sub-regional security in West Africa, Conflict Trends, No. 2.65 ECOMOG, created at the Banjul Summit in May 1990, is a non-standing military force consisting of land, seaand air components, composed of troop contributions from ECOWAS member states. For more information onthe evolution of ECOMOG see M. Khobe, 2000, The Evolution and Conduct of ECOMOG Operations in WestAfrica, ISS, Monograph No. 44.

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1997. In August 1997, the ECOMOG mandate was extended to SierraLeone to reinstate the democratically elected government intopower, following the May military coup, and to restore peace andsecurity.

Conclusion

This paper examined the question on monetary integration forECOWAS through the human security lens. As the antecedents fromancient states in West African colonial history shows, monetaryintegration is not new to West Africa. However the effect ofcolonialism is that in spite of its population size and theattendant benefits from monetary integration, the ECOWAS axis isstill treading the path to the Eco. Forging a common currency hasbeen challenging considering the affiliation of some membersstates to their colonial masters. This is more largely revealedin the trajectory of the ECOWAS vis a vis monetary integration.In this trajectory as rightly pointed out by scholars, ECOWASdoes not fall within the traditional OCAT argument. But shouldthat be a hindrance to the monetary integration project?

The ECOWAS has mandate towards self improvement of the standardof living of the individual, even so does monetary integrationwhich by facilitating free trade improves growth and standard ofliving of the people where it is adopted. Thus it is apparentthat the purpose of monetary integration rhymes with humansecurity mandate of ECOWAS. The intersection of monetaryintegration with human security is further reinforced by the factthat realisation of human security depends on mobilisation ofsocial resources, economic financing, and political will for itsimplementation, which are the ultimate cause or consequence ofincreased trade which, monetary integration facilitates. Whatthen emerges as conclusion from this paper, it is that the needto safeguard human security can be used, and should indeed guidethe argument as ECOWAS negotiates towards the Eco.

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