Abstract:
Global interest in the creation of an economic and monetary union to support
economic growth and development has recently been revived due to the successful
establishment of the Euro as the European Union's single currency. The objective of
this study was to analyse the effect of macroeconomic convergence compliance on
growth by the development of a macroeconomic convergence compliance index for
ECOWAS. The study also sought to test the per capita income convergence or
divergence in ECOWAS and its sub-zones, WAEMU and WAMZ. Using a panel
dataset from 2005 to 2022 on 15 ECOWAS member states, the study examined the
conditional convergence hypothesis and the effect of macroeconomic convergence
compliance on growth using the Generalised Method of Moments (GMM), a dynamic
panel estimation technique. The study established that there was per capita income
divergence among the countries in the ECOWAS region and also that compliance of
member countries with macroeconomic convergence criteria has a positive and
significant effect on economic growth in the ECOWAS and the WAMZ. The findings
suggested that foreign direct investment, gross capital formation, and trade openness
had positive and significant effects on economic growth. The study recommends that
ECOWAS member countries especially the WAMZ countries establish policies that
will facilitate convergence to form the monetary union and eventually the ECOWAS
current union. The study also recommends that poorer countries in ECOWAS should
urgently pursue pragmatic policies to increase education and gross physical capital
formation accumulation and subsequently make efficient use of these resources to
reduce the per capita income gap in the ECOWAS region.
Description:
A Thesis in the Department of Applied Finance and Policy Management,
In School of Business, submitted to the School of
Graduate Studies in partial fulfillment
of the requirements for the award of degree of
Master of Philosophy
(Finance)
in the University of Education, Winneba.
NOVEMBER. 2023