21.04.2004 Regional News

Public educated on the second single currency

21.04.2004 LISTEN

Krobo-Odumase, April 20, GNA - The Manya Krobo District Chief Executive, Mr Andrews Teye, has called for the elimination of administrative bottlenecks and rigid regulatory barriers in the banking system to enable the country to benefit from the proposed second single monetary zone among five West African countries.

He noted that the country stood to benefit from the second monetary zone if she adopted pragmatic economic measures and if the business community eschewed negative practices such smuggling and under-invoicing that were likely to undermine the system when introduced.

Mr Teye who was speaking at the launching of a sensitisation forum on the West African Monetary Zone (WAMZ) and the introduction of common a currency at Krobo Odumase on Monday, called for a realistic pay structure, skilled manpower development and increased productivity for the country to benefit from the objective.

He urged Ghanaians to support the development of democratic governance to ensure peace and stability that would pave the way for continued economic growth for the country under the common monetary zone, noting that it was on account of the prevailing peace in the country that Accra was chosen as headquarters of the Central Bank of the zone.

Speaking on the essence for the introduction of the common currency, Dr Lanto Harding, Co-ordinator of the Sensitisation Committee of WAMZ, explained that it would among others help to create a larger and integrated regional market leading to increased cross-boarder trade and investment among countries of the West Africa Sub-region. He said it would lower the level of inflation and stable prices and exchange rates resulting from adherence to good monetary policies and financial discipline, which would in turn promote business forward planning and attract more foreign direct investment.

Dr Harding, who is also the Head of Policy Co-ordination and Implementation of the Ministry of Regional Co-operation and NEPAD, explained that the implementation of the second monetary policy by Ghana, the Gambia, Sierra Leone, Guinea and Nigeria would in a few years' time, lead to the merger with the CFA zone of eight French-speaking ECOWAS countries for a single currency for the sub-region.

He announced that while the West African Central Bank (WACB) would begin functioning on July 1, 2005, the introduction of the single currency - the Eco - would be effected in phases with the gradual replacement of the currencies of the five countries at a rate to be fixed by the West African Monetary Institute (WAMI) as from the exchange rate prevailing in April next year.

He said the WAMZ had set out macro-economic convergence criteria to be achieved by each of the five member countries of WAMZ, with the four primary ones involving achieving and maintaining price stability single digit end period inflation rate by 2003 and five per cent by 2004. Ensure sustainable government fiscal position by reducing the ratio of budget deficit on GDP to four per cent or less throughout the period 2003-2005; limit Central Bank financing of government budget deficit to 10 per cent or less of previous year's tax revenue over the same period and maintaining sufficient gross foreign exchange reserves of, at least, three months of import cover for the period 2003-2005.

Dr Harding announced that Ghana had been able to achieve three of them through good economic management, leaving the achievement of a single digit inflation, which he said was down from over 40 per cent in 2001 to around 11.4 as at February, this year.

The chairperson for the function, Madam Gladys Appiah, stressed the need for the intensification of the public education programmes to the rural areas to ensure that no one was cheated out during the introduction of the Eco.

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