The Director-General of the West African Monetary Institute (WAMI), Dr Joseph O. Nnanna, has said that Ghana's re-denomination exercise is consistent with the single monetary union within the sub-region.
"The re-denomination exercise is not inconsistent with the introduction of the common currency," he said, and added that it was common practice the world over for some countries to re-denominate their currencies before joining a monetary union.
At a media briefing on the activities of the institute in Accra on Wednesday, Dr Nnanna said that in other jurisdictions such as the European Union, such re-denomination exercises were undertaken by some European countries before the introduction of the euro.
He cited Turkey, which, in its bid to join the EU, had undertaken a similar exercise by knocking six zeros off its currency before it joined the European Union.
The director-general assured the general public that by 2009, the Eco would be introduced and said the common currency would position the sub-region to attract the needed foreign direct investments and promote economic growth.
The WAMI has the mandate to, among other things, provide all the necessary requirement for the establishment of the West African Central Bank and the introduction of the common currency among the five English-speaking West African countries.
The countries are Ghana, Nigeria, The Gambia, Sierra Leone, and Guinea.
The introduction of the common currency was postponed in 2005 to 2009 as a result of most of the countries failing to meet the primary convergence criteria.
The four main primary criteria are; attaining a single digit inflation, external reserves should exceed three months of import cover, central banks within the union must not lend more than 10 percent of the previous year's budget and also budget deficit should not exceed four percent of the Gross Domestic Product (GDP).
Dr Nnanna said there was a lot of benefits that would accrue to member countries under a single monetary union and mentioned employment generation, investment opportunities and free movement of goods and services as some of the benefits.
He said the general council of the WAMI in May this year, gave approval for the implementation of the national convertibility of currencies within the sub-region.
"This is to further enhance intra-regional trade and eliminate exchange losses and transaction risk associated with trade among countries in the sub-region.
Giving a progress report on the member countries, Dr Nnanna said there had been tremendous improvement as compared to 2005.
He said two of the countries, namely Nigeria and The Gambia, had met all the four criteria, while Ghana met two and Sierra Leone and Guinea meeting one of the four primary criteria.
He said if Nigeria and The Gambia could sustain their performance, the two countries would take the lead in introducing the common currency while the other countries would be drawn into the union as of when they meet all the four criteria.
Dr Nnanna said Ghana was not able to meet the single digit inflation target, as well as the budget deficit target, attributing that to the Millennium Development Goals.
He was optimistic that Ghana would be able to meet the remaining targets by the time of the implementation of the common currency.
"The West African Monetary Zone is an important policy," he said, adding that "it is even more realistic now than ever".
Source: Daily Graphic