The 32nd Meeting of the Convergence Council of the West African Monetary Zone (WAMZ) opened in Accra yesterday with a call on member countries to find innovative ways of financing economic infrastructure without adversely affecting national budgets.
“We have to identify those developments that derail fiscal policy implementation in member countries and relate them to our overall objective,” the Vice-President, Mr Kwesi Bekoe Amissah-Arthur, who made the call, urged.
Mr Amissah-Arthur advocated that regional projects should be undertaken with private sector participation, noting that, that might require harmonisation of investment laws in the zone.
The meeting is an assembly of Finance, Trade and Foreign ministers and governors of Central Banks of the WAMZ. It is held twice a year to deliberate on the progress of the zone towards the launching of a Monetary Union and common currency.
A new chairman for the council will be elected at the meeting to replace Nigeria’s Minister of State for Finance, Dr Yerima Lawan Ngama.
The idea of a monetary zone was born on April 20, 2000 during a meeting of six West African countries as a fast track approach to regional integration.
The countries—Ghana, the Gambia, Liberia, Guinea, Nigeria and Sierra Leone, therefore, signed the ‘Accra Declaration’ which spurred institutional arrangements and also defined the aims of the zone in addition to an action plan to ensure the speedy implementation of their resolve.
In the long term, the ambition of the regional leaders is to merge the CFA Franc zone with the WAMZ to form a single monetary zone for West Africa.
But 13 years down the lane, the six countries are yet to reach their goal. The launch of a single currency has been re-scheduled thrice—November 2002, January 2003 and July, 2005.
The inability of the member states to improve and sustain their performance on the convergence criteria has been the key challenge of the WAMZ mission.
None of the six countries, till date, has been able to meet primary convergence criteria, including single digit inflation and reducing budget deficits to not more than four per cent and a minimum of three months import cover.
Part of the problem, the Vice-President said, had to do with “the democratic convergence we have embarked upon and the associated electoral cycle.”
“Many of our countries have failed to meet some of the primary convergence criteria in elections, especially difficult to meet, is the cNontrol of the fiscal deficit. This is a fact that must be confronted,” he added.
With economic recession biting hard on the global economy, the Eurozone has been particularly hit, with Greece, Portugal and Spain struggling with massive economic downturn.
That, Mr Amissah-Arthur said, should guide the debates as the council deliberated to find a panacea to the problems confronting the achievement of a single monetary zone.
“One key lesson from the difficulties being encountered in the Eurozone is that a successful monetary union requires fiscal policy harmonisation,” he stated.
He reiterated Ghana’s commitment to the WAMZ project, which he stated was demonstrated by the country’s fulfillment of all its commitments.
Dr Yerima Lawan Ngama, the outgoing Chairman of the Council, admitted that while the achievements of the zone were impressive to date, “they are not sufficient for the launch of a monetary zone.”
“As we endeavour to put the project on a firmer footing, we should look at the future, not with trepidation but with optimism and the audacity to believe that if we resolve to turn the challenges into an opportunity, work harder together and adhere to the precepts of sound economic management, we can and must establish an enduring monetary zone,” he stated.
In a speech read on his behalf, the President of the Economic Community of West African States (ECOWAS) Commission, Dr Kadre Desire Ouedraogo, urged member countries of the regional body to implement fully the various protocols of the ECOWAS, especially the free movement of goods and people so that citizens of the sub-region could taste the benefits of being part of the body.