Finance Minister, Ngozi Okonjo-Iweala, on Friday, said that the establishment of single currency would not be achievable merely by an act of law.
Okonjo-Iweala stated this in Abuja at the 31st Meeting of the convergence Council of Finance Ministers and Governor of Central Bank of West Africa.
“I wish to state that a single currency cannot be introduced only by means of an act of law; it requires action by the monetary authorities and by market participants in order to make it viable and sustainable,” she said. “The work that has been conducted over the past decade has reflected this dual approach and I would like to commend all of us for our doggedness and our optimism towards pursuing the realisation of this goal.
Let me state clearly that we should not be under any illusion, and I know that we are not, on how difficult it will be to establish a credible, viable and sustainable West African monetary union. The journey has not been smooth, will not always be smooth and there will periods when our collective will may be tested.’’
According to her, the political will which is critical for the achievement of the goal is there; but noted that the will to implement the necessary reform is needed from member states.
She advised that finance leaders in the region should also learn from the lessons of the euro zone to create the enabling environment for the monetary zone to kick off.
“If the turbulence in the euro zone has taught us any lessons, it is that one, sustained convergence is the rock on which monetary union is built,” she said. “Two, tough fiscal rules are necessary to lay the ground for a relatively homogenous fiscal zone. Three, a permanent funding mechanism contributed to by all members is needed to have countries access finance, if they cannot source it from the market. And four, the limits of the central banks should be understood and accepted.’’
Okonjo-Iweala urged member countries to have abiding faith in the project, look at the future with optimism and never give in to haste to achieve the results.
Kadre Ouderago, President of the ECOWAS Commission, commended the effort of all member states and pledged the commission’s support towards establishing the monetary zone.
Ouderago, who was represented by Ahmed Hamid, Commissioner of Trade and Free Movement, said that ECOWAS appreciated the effort of the member countries to come together to discuss issues that would help to move the zone forward.
The West African Monetary Zone (WAMZ) was created in April 2000 with the signature of the Accra Declaration by the leaders of Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone.
The goal of the zone was to have in place a common monetary and exchange rate policy.
In 2001, WAMZ created the West African Monetary Institute (WAMI) to undertake preparatory activities for the establishment of a common Central Bank, to be known as the West African Central Bank (WACB) that will issue a single currency for the five countries.
WAMZ has set January 1, 2015, as the effective date for the inauguration of the monetary union in the zone.