The CFA Franc and the Economic Development of WAEMU Countries : The Effects of the Devaluation during the Resource Boom.

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This research was conducted in order to reveal the effects of the West African Economic Monetary Union (WAEMU) and its common currency, the CFA franc, on WAEMU member countries. First, we examined the historical background of the WAEMU and their neighbouring countries. Second, in order to reveal the relationship between these countries institutions and their economic development, we calculated their real effective exchange rate (REER), nominal effective exchange rate (NEER), and effective real price index (ERPI) for the period 1999-2008, and compared the results. We found that these values for WAEMU members tend to be more stable than those of non-WAEMU members. Against our expectations, the REER of WAEMU member countries had not appreciated because their prices were well controlled. Regarding the effects of devaluation on the WAEMU countries, our investigation is still in progress.