<<Print>>

Members of the Technical Committee for the West African Monetary Zone (WAMZ) on Monday held a meeting to discuss measures critical for a smooth introduction of a common currency, the Eco, by 2015. The Committee, which is made up of representatives from the Central Banks of member countries, Ministries of Finance, Trade, Integration and Foreign Affairs, is expected to submit a working document which would advise the Committee of Governors for WAMZ for action. Speaking to the Ghana News Agency in Accra Mr Temitope Oshikoya, Director General of the West African Monetary Institute (WAMI), said it was important for the five states to meet the convergent criteria which is required for adoption of a single currency. The states are The Gambia, Ghana, Guinea, Nigeria and Sierra Leone with Liberia expressing interest in joining. Mr Oshikoya said the convergent criteria include attaining single digit inflation, meeting a reserve of the Central Bank on imports of goods and services for duration not less than three months as well as a fiscal deficit of not more than 3 percent of Gross Domestic Product, excluding grants. He added that member countries were expected to borrow from the Central Banks an amount that should not exceed 10 per cent of the previous year's tax revenue. Mr Oshikoya said that the Technical Committee's discussion would finally be submitted to the Convergent Council, which is made up of Heads of State of member countries, for consideration and adoption. He lauded the introduction of a common currency, stressing that the rollout would promote economic stability, physical discipline and facilitate and enhance trade. "It will also promote financial integration among member countries and promote regional infrastructure," he said. Mr Oshikoya, however, admitted that there remained challenges for smooth implementation of the single currency and called for commitment from member countries. "Members would have to ratify all the needed legal instruments. Agreements on trade issues as well would have to be ironed out before a smooth take off," he said. Prof. Newman Kwadwo Kusi, Special Adviser to the Minister of Finance and Economic Planning, reiterated government's commitment towards meeting the convergent criteria as well as working out the necessary steps to meet the 2015 deadline. The Committee of Governors of WAMZ is made up of Ministers of Finance from the member countries. WAMZ was formed in 2000 to establish a strong stable currency to rival the CFA franc, whose exchange rate is tied to the euro and is guaranteed by the French Treasury. The eventual goal is for the CFA franc and Eco to merge, giving all of West and Central Africa a single stable currency. The launch of the new currency is being prepared by the West African Monetary Institute based in Accra. This is intended to be the forerunner of a common central bank. However, several of the WAMZ's countries suffer from weak currencies and chronic budget deficits which are currently plugged by their central banks printing more and more notes of decreasing real value.