Monday, September 1, 2003

Government should be consistent with WAMZ objectives


ECOWAS minister of finance has been told to ensure that policies and programmes in their 2004 budgets are consistent with those of the West African Monetary Zone (WAMZ).

The Minister of Corporation and Integration, Alhaji Lawal Guba, gave the challenge in address at the opening of the 12th meeting of the convergence council of ministers and governments of the Central of WAMZ member countries.

"While I am happy at the improvements, may I however observe that we should continue to build on the performance and sustain the momentum," the minister said.

He stressed the need to extend the areas of focus to the secondary convergence criteria "where we have not recorded significant progress."

"We should also continue deepen our institutional reform measures to improve on the performance of our economies to enable us sustain macroeconomics convergence," Guba said.

He cited fiscal dominance as a major area of concern and said that the various measures taken to control the liquidity overhang, should not constrain development.

"Other measures should be taken to increase productivity and efficiency in the use of our limited

available resources," Guba, now chairman of the council, said.

In a statement read on his behalf at the occasion, ECOWAS executive secretary, Dr. Mohammed Ibn Chambas, noted that through regional initiative, economies of member states were moving away from large budget deficits.

He, however, noted that at 65 per cent compliance with the four primary convergence criteria, "we are still quite some distance away from the degree of policy convergence required for creating a strong currency."

Chambas said more attention should be paid to the secondary convergence criteria where the overall compliance level had fallen to 35 per cent, in the statement presented by ECOWAS director of economic policy, Mr. Frank Ofei.

In his welcome address, the Gambi Secretary of State for Finance and Economic Affairs, Mr. Famara Jatta, who is the outgoing chairman of the council, said monetary integration programmes had imposed discipline on member states.

Jatta, however, said that the depreciation of currencies of member states which had set in inflationary pressures, should be of concern because the potential effect of high exchange rate could suppress growth in the long-run.

The News Agency of Nigeria (NAN) reports that the council met to assess the implementation of the macroeconomic convergence criteria for attainment of monetary union by July 1, 2005. the recommendations of the council is expected to be considered and approved by the heads of state and government of member state of WAMZ at their one-day meeting in Abuja tomorrow.

Member states of WAMZ are Nigeria, the Gambia, Ghana, Sierra Leone and Guinea.

Liberia, the sixth member, is yet to take part in the activities of the zone due to war in that country.