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14.01.2005 Business & Finance

WAMZ undertakes study on single currency process

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Accra, Jan. 14, GNA - Stakeholders of the West African Monetary Zone (WAMZ) are assessing the preparedness of member states to determine their preparedness towards the achievement of a second monetary zone for the English speaking West African States.

The ultimate goal of the study is to enable member states of ECOWAS, both Anglophone and Francophone, to assess themselves and come out with strategies aimed at speeding up the process of achieving a single currency for the sub-region. Dr Michael Ojo, Director-General of the Accra-based West African Monetary Institute (WAMI), told the Ghana News Agency after the opening of the 16th meeting of WAMZ Convergence Council on Friday that the Institute had tentative figures of how far each of the four countries of the second monetary zone had reached within the convergence criteria.

He said, however, that the figures were not firm hence the need for the study, to come out with accurate findings.

The results of the study would be ready in March or April this year.

Countries preparing for the second monetary zone are Ghana, Nigeria, Sierra Leone and the Gambia. The common currency of these countries would be the Eco.

The meeting in Accra forms part of the annual meetings of the Convergence Council of Ministers and Governors of Central Banks to take stock of activities of member states and to find the way forward toward the establishment of the common currency in the sub-region.

The theme for this year's meeting is "Single Currency for Economic Prosperity."

Over the years, West African states have struggled to achieve a common currency although Francophone West African States have one currency, the CFA Franc.

The second monetary currency for the Anglophone West African States has taken some time to achieve.

The convergence criteria of for the second monetary zone are: Budget deficit or GDP ratio less than or equal to five per cent, central bank financing of fiscal deficits less than or equal to 10 per cent of previous year's tax revenue, inflation to be limited to single digit and external reserves or import cover of at least three months

Mr Yaw Osafo-Maafo, outgoing Minister of Finance and Economic Planning, noted that as member states strived to achieve the goals of an economic union, there was the need to shift emphasis from peace and security to economic development.

"This will ensure that enough of our resources are channelled to economic development that will enhance the reduction of the poverty of our people."

Dr Mohamed Ibn Chambas, Executive Secretary of ECOWAS, urged member states to attach more seriousness to the achievement of the single currency since it would open up their economies for development.

He asked participants drawn from countries like Ghana, Gambia, Sierra Leone, and Liberia to facilitate the monetary integration process. The effort to achieve a single currency was tied to trade, Dr Chambas said, and advised the stakeholders to strive to eliminate local hindrances to the implementation of the ECOWAS Trade Liberalisation Scheme.

This, he said, would go a long way to translate the obligations under the convergence programmes into national policies and in the long run bring to fruition the single currency for the development of regional economies. Mr Kwadwo Mpiani, Chief of Staff, said it had become necessary for member countries to work together because individual efforts towards development had been undermined by global groupings.

"Recognising the diversity of factors that impact on regional cooperation and integration, we need to put in place a set of coherent activities aimed at making available information that has an impact on our socio-economic development and to find solutions to problems that are endemic." The Chief of Staff said Ghana managed to achieve the primary convergence criteria since October 2004.

"We cannot afford any avoidable delays," Mr Mpiani said, adding that there was the need for the country to build on what it had achieved. El Hajj Faliboe Bah, Ambassador of Guinea in Ghana, said the shortcomings of the single currency process, uncovered through constant monitoring should not dampen the political will to achieve the set objectives this year.

The outcome of the meeting would be reported to the Heads of State and governments at the ECOWAS summit to be held in Accra on Wednesday, January 19.

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