Common currency for West Africa to remain a dream

Accra- Ghana (PANA) -- The idea of West Africa taking a major step towards a common currency come next year will remain a dream, at least for now.
The six countries outside the franca CFA Zone, which are to form a second monetary zone effective 2003 as a first crucial step towards a single currency for the sub-region a year later, are lagging behind in their harmonisation deadline and have a stiff task ahead of them.
Ghana's finance minister Yaw Osafo-Maafo made public on Tuesday what had been murmured privately for months - none of the countries could meet the deadline.
He told a meeting of African finance experts in Accra that Ghana could not meet the deadline and so also the other five countries.
Nigeria, Ghana, Liberia, Sierra Leone, Guinea and Gambia were to harmonise their currencies under stiff criteria, which looked an uphill task for the weak economies from the onset though the political will seemed to be high.
The eligibility criteria are that member countries must maintain price stability by reducing inflation to a single digit by 2000 and five percent by 2002.
They must maintain budgetary discipline by reducing budget deficit to a ratio of five percent of GDP by 2000 and four percent by 2002.
Deficit budgetary financing by the Central Bank of member countries should not exceed 10 percent of the previous year's fiscal receipts and they must maintain minimum foreign exchange reserve position that will support import cover for three months by the end of 2000 and six months by 2003.
Though politicians and economists had expressed cautious optimism, especially because of a clause in the agreement that it could start with only two countries meeting the conditions, the countries were having economic difficulties, experts point out.
It is known that Sierra Leone is just emerging from a decade of war, while Liberia is again deep in the throes of war, and Guinea is fighting rebels and having the shocks of Liberia's war.
Ghana and Nigeria are still battling to redirect their economies.

17 september 2002 16:17:00




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