Dakar- Senegal (PANA) -- Leaders of the five-member West African Monetary Zone (WAMZ) will meet in Dakar, Senegal, Thursday to agree a name for a new currency to be used within the second monetary zone of the Economic Community of West African States (ECOWAS).
The WAMZ meeting is on the sidelines of a two-day summit of the 15-nation ECOWAS.
ECOWAS officials told PANA the Committee of Governors of Central Bank of the zone met last Sunday and proposed three names for the new currency.
The proposal was later adopted by a meeting of the Convergence Council, which comprises Ministers of Finance and Economic Development, Integration, Foreign Affairs and Governors of Central Bank of the five WAMZ States.
The five countries - Gambia, Ghana, Guinea, Nigeria and Sierra Leone - signed an agreement in April 2000 to set up in 2003, a second monetary zone parallel to that of the eight-member CFA franc used in the West African Economic and Monetary Union (UEMOA) within ECOWAS.
UEMOA groups Benin, Burkina Faso, Cote d'Ivoire, Guinea-Bissau, Niger, Mali, Senegal and Togo, while Liberia and Cape Verde are observers to WAMZ.
The intention is for both currencies to merge in 2004 into a single monetary zone for the sub-region.
Thursday's meeting, the third by WAMZ leaders, is also expected to approve the establishment of an Exchange Rate Mechanism (ERM) to take effect from 1 April 2002.
This will handle exchange rate parities between currencies of the zone and an anchor currency, the US dollar.
The ERM, expected to be in operation until the adoption of the common currency, will provide a reference point for member States to evaluate the effectiveness of their economic policies.
The WAMZ leaders will also decide the headquarters of the zone's Central Bank and the 100 million-dollar capitalisation of the Bank, based on ECOWAS budget contribution formula.
They are expected to endorse the establishment of 100 million-dollar stabilisation and Co-operation Fund, which they approved in December 2000.
Member States are required to make an initial contribution of 50 million dollars or 50 percent of the Fund's capital by the end of February 2002, and complete the difference by September.
The meeting is also expected to approve the development of national payment systems and an efficient cross-border payment arrangement for the five-member zone.
David Asante, Technical Adviser to the Ghana-based West African Monetary Institute (WAMI), told PANA that the dual-currency concept is to facilitate the convergence process for the creation of an ECOWAS single monetary zone.
"The different currencies used by Member States are not convertible and it is from the harmonisation of monetary and fiscal policies that a single monetary union can emerge for the sub-region," he said.
Having missed the initial 2000 target for the creation of a single monetary union within the Community, Nigeria and Ghana are pushing for the second monetary zone for an eventual merger with the UEMOA's CFA franc zone, under a "fast-track" approach.
A single currency is considered a crucial element of the sub-regional economic integration under the treaty that set up ECOWAS in 1975.