The Minister of State for Finance and Economic Development from neighboring Sierra Leone, Mr. Alhaji Foday B.L. Mansaray, has told delegates of the just-end Statutory Meeting of the West African Monetary Zone held in Monrovia that falling commodities prices is responsible for slow economic growth in the region.
Speaking over the weekend at the Central Bank of Liberia, Minister Mansaray notes that the recent unfavorable development in the global economy, including falling commodity prices, slow growth in advanced economies and uncertainties created by Britain's attempt to leave the European Union.
WAMZ came about as the result of the West African Monetary Institute (WAMI) which was set up in Accra, Ghana, in January 2001 and began operations in March 2001. The Institute is to undertake technical preparations for the establishment of a common West African Central Bank and the launch of a single currency for the West African Monetary Zone (WAMZ).
In fulfillment of its mandate, the Institute currently conducts bi-annual onsite and monthly offsite multilateral surveillance missions to monitor Member States' compliance with both quantitative and qualitative benchmarks.
The Heads of State of six countries in West Africa, as part of the fast-track approach to integration, decided in Accra, Ghana on April 20, 2000 to establish a second monetary zone to be known as the West African Monetary Zone by the year 2003. These countries, namely The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone, signed the 'Accra Declaration' which defined the objectives of the Zone as well as, an action plan and institutional arrangements to ensure the speedy implementation of their decision.
"The adverse impact of this global development on the WAMZ reveals the fact that our economies are highly vulnerable to external shocks; this is confirmed by the study carryout by WAMI, which indicates that all members countries are highly vulnerable to the external shocks", he adds.
Mr. Mansaray explains that the vulnerability of the region's economies to external shocks does not only undermine the ability of member countries in attaining this convergence criteria, but sustaining the convergence over the time will be a major challenge, with attendant implication for the credibility of the monetary union.
He stresses that the need for coming together to promote economic and monetary union is now more relevant than ever before, saying that being together "We can boost the capacity of our economy to withstand any shocks. You may be aware that studies have shown that participating in an economic and monetary union minimizes the vulnerability of external shocks."The Sierra Leonean envoy notes that coordination, and harmonization of economic policies under such arrangement will help to boost the resilience of economies in the region and the WAMZ as a whole.