Nigerian sleaze hits single currency plan

Officials at the International Monetary Fund (IMF) has warned West African nations against creating a single currency, over fears that Nigerian involvement would undermine its credibility.

Monetary union would leave most participating countries worse-off than if they had retained their own currencies, the IMF warned.

The find warned over the inclusion of Nigeria, which has a troubled history of economic management.

Eight French-speaking countries in West Africa already use a common money, the Central Franc African (CFA).

These countries are proposing to form by 2004 a single monetary union with English speaking countries including Ghana, Sierra Leone and Nigeria.

The report said the size of the Nigerian economy meant any monetary union would be dominated by Nigeria.

Yet the corruption in Nigeria, together with the country's tendency to engage in uncontrolled government spending, would make it an unsuitable partner, IMF researchers said.

Nigeria's dependence on oil - an unstable source of revenues due to volatile crude prices - was also highlighted as a cause for concern.

Several areas of the world have been considering the formation of a single currency following the successful launch of the euro across 12 European countries.

Supporters say a single currency can boost intra-regional trade by minimising transaction costs, and is likely to be more stable than individual currencies.

But it would also leave the countries' economies ruled by one central bank, making them vulnerable should emergency action - such as devaluation - be required.