16 July 2014

West Africa: ECOWAS Single Currency - January Date Not Feasible, Says Emefiele

THE Central Bank Governor, Mr Godwin Emefiele, on Wednesday said the launch of Single Currency for the West African Monetary Zone (WAMZ) by January 2015 may not be feasible.

Emefiele made the assertion when he delivered a Keynote address at the 31st meeting of the Committee of Governors of WAMZ held in Abuja.

According to him, from the study of countries' preparedness, there are challenges hindering the performance of their economies from meeting the convergence criteria for single currency.

"The study notes that various countries continue to make remarkable progress towards the establishment of a common market and the implementation of the ECOWAS trade integration protocols and reform of their financial systems.

"On the strength of this assessment, the study concluded that the launch of the monetary union by January 2015 is unlikely'.

"Their level of institutional preparedness for the monetary union remains inadequate," he said.

Emefiele said the study showed that the performance of member states' on the convergence scale relative to that required for the establishment of a monetary union was still inadequate.

He added that the study revealed that member countries business cycle synchronisation in terms of real Gross Domestic product (GDP), inflation, broad money and interest rate remained weak.

Emefiele said there was need for the buy-in of all member states in WAMZ project, adding that effort to update each other on the level of progress should be strengthened.

He called for intensified effort on sensitisation of all stakeholders and urged individuals to evaluate, sign and ratify the various WAMZ protocols and strive to implement them accordingly.

"It is my believe that with strong commitment to the WAMZ project as demonstrated so far, combined with the necessary political will, we can use our various state machineries to foster the union project by promoting trade integration.

"As the Central Bank and Financial Sector regulators, we must commit to develop and support sound banking system and efficient payment network capable of facilitating the required rapid trade expansion in the sub-region," he said

The governor said that effort must focused on effective coordination between fiscal and monetary policies to support price stability mandate and create appropriate macroeconomic environment conducive for intra-regional trade.

He called for the implementation of a framework for quoting and trading in WAMZ member countries' currencies to improve trade integration.

The News Agency of Nigeria reports that Emefiele has been elected the Chairman of the committee to succeed Mr Amadou Colley, Governor of the Central Bank of the Gambia.


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