The West African Monetary Institute (WAMI), has attributed the inability of member states of the West African Monetary Zone (WAMZ) to implement its single currency agenda due to global economic shocks that continue to rub off on the zone.
In his opening remarks, at the 48th meeting of the Committee of Governors of The Central Banks of member states of The West African Monetary Zone (WAMZ) in Abuja, Director-General of WAMI, Olorunsola E. Olowofeso, stated that the situation has leading to a slowdown in WAMZ economies saying that it would take longer time to achieve the single currency agenda.
While noting that high inflation, interest rate, currency depreciation, and sovereign debt crises compounded by widespread insecurity continues to hamper growth in the zone, Olowofeso urged member states to focus on the benefits that comes with implementing the initiative.
“The assessment of Member States’ performance reveals that, as at the end of June 2023, all WAMZ Member States failed to meet all the four primary convergence criteria.
“The Zone’s performance score declined to 29.2 percent, compared to 41.7 percent during the same period in 2022.
“The medium-term projections on macroeconomic convergence, as indicated by the multi-year national macroeconomic convergence and stability programmes of the Member States, suggest that none of the WAMZ Member States will meet all the four primary convergence criteria on a sustainable basis for the remaining three consecutive years (2024-2026) of the convergence phase of the ECOWAS Single Currency Roadmap (2021-2027),” he said.
The WAMI DG urged Member States to upgrade their payment system infrastructure noting that without which it would be difficult for the zone to have a central payment system.
He said that WAMI will continue to effectively collaborate with the ECOWAS monetary institutions in the implementation of all the WAMZ programmes.
Part of the initiative to fast track achievement of the single currency, includes the West African Capital Markets Integration; Macroeconomic Economic Convergence; Cross-border banking supervision; Establishment of Financial Stability Council; Utilization of PAPSS; Domestic Debt Markets Development.
“To this end, logically sequenced and synchronized structural reforms would not only anchor inflation expectations but also reinforce productivity growth, debt sustainability, and improve performance on macroeconomic convergence,” he added.
In his acceptance speech as Chairmanship of West African Monetary Zone (WAMZ) Convergence Council, Wale Edun, noted that despite the daunting challenges associated with the implementation of a monetary union, member states should continue to strive to make a success out of it.
Edun, who is Nigeria’s Minister of Finance and Coordinating Minister of the Economy, assured the gathering that the country remains committed to achieving the objectives of the zone.
He said, “Ladies and Gentlemen, I am informed that recent reviews indicated sluggish growth and fragile recovery, reflecting global developments. This will also impact convergence within our region as the medium-term forecasts also point to dampened growth at least in the short to medium term.
“Honourable members of the WAMZ Convergence Council, though the challenges of a monetary union appear quite daunting, and the previous leaderships realized the adverse consequences of inaction and thus steered the course, not giving up, which demonstrates our resilience and determination.
“It is important to sustain this tempo and confront our worst fears with open minds, focused on the bigger picture of a truly integrated, competitive and prosperous sub-region by ensuring the necessary disciplines and implementing our commitments to convergence and achieve stability.
“Ladies and Gentlemen, what we all seek to achieve in terms of regional economic integration may be difficult but not impossible. I am sure we have the wherewithal and resilience to realize our ambition. We just need to be very smart in our planning and prioritization, as well as decisiveness in our actions. We must, as a bloc, work together to strengthen and improve the economies of the Zone. I pledge to you, as Council Chair, my full and dedicated efforts to advance this regional agenda.”
