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Central bank for 5 west african countries { July 26 2004 } Original Source Link: (May no longer be active)
http://allafrica.com/stories/200407261415.htmlhttp://allafrica.com/stories/200407261415.html
Common Central Bank By July 2005
The Independent (Banjul)
NEWS
July 26, 2004
Posted to the web July 26, 2004
By David Thoronka
Banjul
A common Central Bank for five West African countries involved in the process leading to the sharing of a common currency will have begun operations by July 2005.
To be officially known as the West Africa Central Bank (WACB) the policy-guiding institution will effectively regulate the Eco currency slated for July next year to be shared by Nigeria, Guinea (Conakry), Ghana, Sierra Leone and The Gambia. Currently its statute is being revised to bring it in line with the principles of a unitary central bank system.
The main functions of the Central Bank will be to issue the common currency, the ECO, conduct monetary policy of the zone and manage the zonal foreign reserves.
The West African Monetary Zone WAMZ is an institutional cooperative framework for achieving this long awaited West African common currency.
This commitment is made under the "Accra Declaration" and signed by six countries in West Africa on the establishment of a second monetary zone - for, Ghana, Nigeria Sierra Leone and The Gambia. Liberia and Cape Verde are not yet members but attended WAMZ as observers.
WAMZ came into existence December 15, 2000 when the five countries signed the article of agreement of the zone at the second summit of the WAMZ heads of state and government held in Bamako, Mali. Therefore, the objective of the WAMZ is to establish a monetary union characterised by a common Central Bank and a single currency to replace the existing five national currencies. It is also from this various national currencies that specimen is being earmarked to suit the characteristic of the anticipated "ECO".
There are organs of the zone set up to materialise the common currency.
The authority of Heads of State and Government is the supreme body of the zone made up of the Heads of State and Government of the zone sitting in conference. They are expected to meet twice a year.
The convergence council is composed of four ministers from each country representing the ministries of Foreign Affairs, Finance, Trade/Commerce, regional integration and cooperation; the governors of Central Banks of the five countries and the ECOWAS secretariat. They meet thrice a year.
The forum for finance ministers is the advisory body created to ensure greater involvement of finance ministers in the implementation of the programme of the zone. They converge twice annually to deliberate on the status of implementing of the WAMZ programme.
The Committee of Governors acts as a technical supervisory body of the zone while, the technical committee is the expert body that reviews reports and makes proposals for the consideration of the Committee of Governors and the convergence council. It is made up of representatives of the convergence council members, as well as the ECOWAS secretariat.
WAMZ has recorded significant achievements such as the adoption of the legal, institutional and administrative framework of the zone to establish the WAMZ agreement, the WACB statute, the initiation of the framework for monitoring and assessment of the macro-economic convergence criteria, the setting up of Zonal and National payment system committees, the undertaking of studies to develop a centralised banking supervisory authority to be known as the West Africa Financial and Supervisory Authority (WAFSA) and an efficient regional and national payments system.
On the other hand, the extension period for a monetary union, a comprehensive assessment by West African Monetary Institution (WAMI) of the status of preparedness of member states to form the monetary union scheduled for 2003 indicated the unsatisfactory performance of all the five countries in meeting the primary convergence criteria. Hence the authority at its 4th session in Conakry on November 7, 2002 decided to extend the date for establishing the union from January 2003 to July 2005. By this extension countries were given more time to prepare for meeting the convergence criteria as well as all financial obligations.
The main elements that will be focused on are the multilateral surveillance involving quarterly monitoring and assessment of country performance; adoption of country programmes and incorporation of convergence targets in national budgets and economic programme.
Monitoring of qualitative aspect of integration including the movement of persons, goods and capital; undertaking sustained campaign of sensitisation and putting in place the essential architectural building blocks of the union, as the scheduled time for the release of the ECO as legal tender by July 1, 2005 ticks nearer.
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