Abstract
We consider the case of Economic Community of West African States (ECOWAS) which is one of the largest free trade areas in Africa. We examine whether the ECOWAS member countries have favourable economic characteristics to undertake a deeper economic integration, moving towards an economic union status. Under favourable condition, policymakers in the ECOWAS region can be persuaded to implement deeper economic integration. An increase in trade, resulting from deeper economic integration in the ECOWAS region, can compensate for fall in trade between ECOWAS, and rest of the world. Because of the global economic crisis, trade flow in the ECOWAS region has fallen besides adversely affecting regional macroeconomic variables: trade balance, current account balance, fiscal balance, investment and domestic credit. The poor state of macroeconomic variables has a direct impact in reducing mean income of the region, and indirectly might affect income distribution. Increase in trade in the ECOWAS is expected to generate resources to increase aggregate demand, and to meet regional development expenditures.
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