ECO help integration in ECOWAS - Harding
Aflao, April 4, GNA - The introduction of a common currency the ECO, in Ghana and four other ECOWAS countries would enhance industrialisation, trade and access to more foreign direct investment in member states.
Dr. Lamto Harding, Coordinator of Ghana's Sensitisation Committee on the West African Monetary Zone (WAMZ) said this at a public forum organised by the Committee under the auspices of the Ministry of Regional Co-operation and NEPAD at Aflao on Saturday on the introduction of the five nation currency. He said the common currency idea, which was mooted in 1999 by Ghana and accepted by Nigeria, Guinea, Sierra Leone and the Gambia would ensure a stronger monetary base for better economic development among member countries.
Dr Harding said the five countries are running prudent economic policies to meet the four criteria without which they could not actualise the monetary union. He mentioned the criteria as, a single digit inflation rate, budget deficit ratio of not more than four per cent, limiting government borrowing to 10 per cent of previous the year's revenue and at least three months foreign reserves.
Dr Harding said Ghana has met all these criteria except for inflation. He said a West African Central Bank (WACB), which is to be established on July 1, this year, with headquarters in Ghana, would be responsible for issuing the ECO, maintain price stability, formulate and implement a single monetary policy for WAMZ and also manage the foreign reserve of the zone.
Dr Harding said, recognising that good governance was vital to a buoyant economic development, member countries are applying the NEPAD and Peer Review Mechanism to ensure good governance and quicken their qualification for the common currency regime. He said it is the policy of WAMZ to co-opt the eight-member CFA Zone into the ECO zone for a much bigger financial environment towards the promotion of trade and industry. Dr Harding said ECO, would probably be introduced on a trial basis in 2006, and predicted that it could do better against international currencies.
He said after the creation of the currency, member countries would be required to maintain the good financial policies to ensure low inflation, and the cash budget management system currently being run by Ghana. Dr Harding said the zone would create a reserve of 200 million dollars in the WACB to offset financial problems in the zone and keep inflation at bay.
Mr James Quarshie, acting Chief Director of the Ministry of Regional Cooperation and NEPAD said the common currency would enhance regional integration and cooperation in which Ghanaians would have a lot of benefits such as direct and indirect employment following the location of the WACB in the country.
Mr Divine Ayidzoe, Ketu District Coordinating Director (DCD) in an address expressed dissatisfaction about the unsatisfactory level of compliance of the trade and economic related protocols of ECOWAS, meant to promote economic integration and wealth creation. He said Ghana has already reached bilateral agreements with Burkina Faso and Cote d'Ivoire to fast track ECOWAS protocols and agreements in relation to the movement of people, goods and services across their frontiers to enhance trade.