West African Common currency faces blur future

Minister of Finance Yaw Osafo-Maafo on Wednesday said none of the countries forming the West African Monetary Zone was capable of meeting the convergence criteria set out by the West African Monetary Institute (WAMI).

Even though the five member countries - Ghana, Nigeria, Liberia, Sierra Leone and The Gambia - were working to meet the set targets within the timeframe, "they cannot meet them fully despite the fact that they will make some inroads", Osafo-Maafo told journalist in Accra.

The criteria stipulate that member countries must maintain price stability by reducing inflation to a single digit by 2003, reduce budget deficit to a ratio of five per cent by 2000 and four per cent by 2002.

Budgetary financing by the central bank of member countries should not exceed 10 per cent of the previous year's fiscal receipts and maintain foreign exchange reserves that will support import cover for three months by the end of 2000 and six months by 2003.

The Finance Minister said meeting the target was paramount to the government's objectives, adding that the position of the two Bretton Woods institutions (IMF & World Bank) was just to support the government to achieve some of the targets even though within a different setting.

The Bank had not in any circumstance asked Ghana to back out of the zone, he stated. "We see the need to stick to the zone and no one can change our mind about it."

A number of government officials and some independent bodies have recently questioned the possibility of meeting the WAMI criteria within the time set by the Institute.

But WAMI officials claimed it would be possible if the countries adopted stringent fiscal and monetary policies.