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Business News of Wednesday, 15 November 2006

Source: GNA

Members of Monetary Zone to meet

Accra, Nov. 15, GNA - The West African Monetary Zone (WAMZ) would hold its 2006 meeting from November 21 to November 24 but for the first time, the organizers have invited the business sector and leaders of journalists associations in all the member states to participate in the meeting expected to come out with proposals for the take off of the second currency for the Sub-Region in 2009.

Dr Joseph Nnanna, Director General of the West African Monetary Institute (WAMI), told journalists in Accra on Wednesday that top on the list of issues to be discussed would be the call for member states to abolish exchange control regulations within their countries to allow for easy currency convertibility among them.

Already, two banks including the ECOBANK, which has its presence in 15 countries, have expressed interest in allowing citizens in the zone to transfer and withdraw money in the various denominations where ever their businesses take them.

Forex bureaux would also facilitate the conversion of currencies while interested private persons could access debit cards as part of efforts to eliminate criminality in the changing of money, prevent counterfeiting, loss of money to robbery attacks and to make trading easier among the member States.

Dr Nnanna expressed optimism that the 2009 target for the take off would be met and said the currency convertibility was one way to ensure that the second monetary zone took off at the stipulated time. He said the 2009 takeoff date would not be extended again. "If the date is extended; the whole process will collapse," Dr Nnanna said and added: "We cannot afford to fail this time."

Dr Nnanna said the interest groups agreed in Banjul, The Gambia that any two countries, which were able to meet the four criteria by the target date, could begin to use the Eco while the others joined as and when they were able to meet the criteria.

Ghana, Nigeria, The Gambia, Sierra Leone and Guinea are currently pursuing the establishment of the second currency in the West African Sub-Region which was extended from 2003 to 2005 and finally to 2009. So far, member States have each scored within a range of one to four out of the four criteria required to enable the currency to be established. The criteria are the achievement of a single digit inflation; a GDP or deficit ratio of less than or equal to five per cent; a central bank financing of government activities of less than or equal to 10 per cent of tax revenue of previous year and an import or reserve cover of more than three months.

Dr Nnanna said the achievements of the criteria was necessary to ensure growth in the economies of the English speaking West African States, which had the potential to create jobs and reduce poverty. He said the success of the establishment of the Eco lay with the political will of member States and must also be spearheaded by the private sector which stood to benefit most by indulging in free trade. He cited the example of Voltic Mineral Water, which is bottled in Ghana but is marketed in other countries in the Sub-Region saying that when the introduction of the second currency was successful, businesses would thrive since the market would be widened.

This, he said, would also encourage investments into the Sub-Region because the investors would have a larger market to do business in. Dr Nnanna said the latest report of the zone presented at the meeting this month was encouraging and gave hope for the take off of the second currency by 2009.

The French speaking West African States introduced the first common currency which is the CFA Franc under a zone called the UEMOA and whose activities are monitored and coordinated by a common central bank. The English Speaking West African states will also establish a common central bank when the Eco is introduced.

About 100 delegates made up of Finance Ministers, Governors of Central Banks, Legislators, Industrialists, the World Bank and the International Monetary Fund and Council Members of the WAMZ are expected to participate in the three tier meeting made up of the Technical Committee, the Committee of Governors and the Convergence Council Meetings. 15 Nov. 06