Vice-President Dr. Mahamudu Bawumia has called upon the Member States of the West African Monetary Zone (WAMZ) to intensify their efforts in achieving the macroeconomic convergence criteria necessary for a single currency by January 2027.
This appeal comes in the wake of the Member States of WAMZ falling short of meeting all four convergence criteria for a monetary union as of June 2023.
Vice President Bawumia delivered this message during his address at the 2023 Mid-Year Statutory Meeting of West Africa Monetary Agency (WAMA), the West Africa Institute for Financial and Economic Management (WAIFEM), and the West Africa Monetary Institute (WAMI) held in Accra on Friday.
The primary objective of the meeting was to assess the macroeconomic development and convergence reports from Member States within WAMZ and evaluate the progress made in meeting both the primary and secondary criteria required for establishing a single currency.
The gathering brought together finance ministers and central bank governors from WAMZ member states, including Ghana, Nigeria, Liberia, The Gambia, and Sierra Leone.
Vice President Bawumia emphasized that the ongoing global geo-economic shifts make it increasingly crucial to pursue comprehensive monetary integration within the sub-region.
“It is important for the Member States of the WAMZ to take ownership of the convergence programme by mainstreaming it into the national macroeconomic frameworks and undertake meaningful reforms to achieving the convergence criteria on a sustained basis, otherwise the vicious cycle of endless postponements will continue to haunt us,” Dr Bawumia stated.
“We, therefore, must double our efforts in ensuring macroeconomic convergence and stability which are the necessary conditions for the take-off of a monetary union.
“As we engage in development activities in our various countries, we should not lose sight of the fact that macroeconomic stability is vital for monetary union to thrive,” he added.
The Vice President emphasized the importance of striking a balance between economic development and maintaining macroeconomic stability.
He acknowledged the formidable challenges in meeting the criteria but highlighted that considerable progress had been achieved over the years in implementing the activities outlined in the ECOWAS single currency roadmap.
“I understand that the name of the proposed single currency has been determined and is called the eco.
“A federal model structure has been adopted for the common central bank, the name of the common central bank has been determined as the Central Bank of West Africa, a flexible exchange rate regime adopted, and inflation targeting framework chosen,” he added.
Nonetheless, he pointed out that more than half of the activities outlined in the roadmap remained unfinished, encompassing tasks such as statistical harmonization, macroeconomic convergence, and capital account liberalization, among others.
He commended the African Development Bank for its substantial financial backing of US$9 million to WAMI for the implementation of the Unique Bank Identity (UBI) Project. This project aimed to establish secure digital banking transactions and enhance bank customer identification.
To address the regulatory requirements of emerging financial technological innovations within a globally interconnected financial system, model legislative instruments have been drafted for adoption by member states.
The Vice-President also highlighted substantial progress in debt and capital market integration, as well as insurance integration within the WAMZ.
He reiterated the Government of Ghana’s commitment to reestablishing macroeconomic stability, which serves as the foundation for sustainable economic growth and development.
“We are leaving no stone unturned under our Post Covid-19 Programme for Economic Growth (PC-PEG) aimed at restoring macroeconomic stability and debt sustainability, building resilience through the implementation of wide-ranging and strong structural reforms programming and laying the foundation for stronger, more inclusive growth, while also protecting the poor and the vulnerable”.
In the medium term, he emphasized the government’s determination to exert substantial effort in revitalizing the economy and enhancing its alignment with the convergence criteria.
Vice President Bawumia extended his appreciation to WAMI and all involved stakeholders for their dedication in maintaining the single-currency project as a top priority and ensuring its progress.
Additionally, Ghana’s Finance Minister, Mr. Ken Ofori-Atta, was appointed as the Chair of the Convergence Council of Ministers and Governors of the Central Banks of the West African Monetary Zone.