TITLE:
Exchange Rate Regimes, Inflation, and Growth in the Economic Community of West African States
AUTHORS:
Amath Ndiaye, Philbert Fred, Mamadou Cherif Diallo
KEYWORDS:
Exchange-Rate Regimes, Inflation, Economic Growth, Nominal Depreciation, ECOWAS
JOURNAL NAME:
iBusiness,
Vol.18 No.4,
October
30,
2026
ABSTRACT: This study examines the relationships between exchange-rate movements, inflation, and economic growth in ECOWAS countries over 2000-2024, comparing the West African Monetary Zone (ZMOA) with the West African Economic and Monetary Union (WAEMU) and Cape Verde. Descriptive statistics reveal differences in growth, inflation, and nominal exchange-rate dynamics across the groups. Our central result is that, in the ZMOA, nominal exchange-rate movements Granger-cause inflation, which in turn is significantly and negatively associated with economic growth. This exchange-rate-inflation-growth sequence is not established for the WAEMU-Cape Verde group: exchange-rate movements do not Granger-cause inflation, and the inflation-growth coefficient is statistically insignificant. In the ZMOA, the direct coefficient on nominal depreciation in the growth regression is negative but insignificant; in the WAEMU-Cape Verde group, it is negative and significant only at the 10% level. Gross fixed capital formation is positively associated with growth in the latter group. These findings distinguish predictive precedence in the Granger test from conditional associations in the growth regressions; they do not establish a structural causal chain or prove that one exchange-rate regime causes superior macroeconomic performance, because the country groups also differ in institutional and structural characteristics.