Ghana pledges loyalty to single monetary
zone
GSE All-Share index inches back
Ghana pledges loyalty to single monetary
zone
Accra (Greater Accra Region) 20 April 2000
Ghana on Wednesday resolved to remain a loyal partner to the ECOWAS Monetary Integration process and pursue policies that will allow her to recover to meet the targets set for macroeconomic convergence, in spite of the micro-economic difficulties facing the country.
Mr Kwamena Ahwoi, Minister of Planning, Regional Economic Cooperation and Integration made this pledge at the opening of the Ministerial Convergence Council Meeting on the Second Monetary Zone for ECOWAS in Accra.
It is being attended by the Ministers of Trade, Commerce, Energy, Transport and Governors of central banks from Ghana, Nigeria, Guinea, Liberia, The Gambia, and Sierra Leone. Mali, which is the current chairman of ECOWAS, is attending as an observer.
The Convergence Council has as its focus issues on monetary integration with particular reference to the establishment of a second monetary zone with a single currency in the sub-region. Their ultimate task is to achieve the second monetary zone by 2003 and merge it with the CFA to form a single monetary zone by 2004.
It is their first meeting since the 22nd Ordinary Summit of the Authority of the Heads of State and Government of ECOWAS in Lome, Togo, in December last year.
Mr Ahwoi said monetary integration in the sub-region is important due to the many benefits that could be derived from it as
it would facilitate trade in the sub-region by reducing everyday transaction costs in currency conversions, eliminate foreign exchange risk and also help reduce economic uncertainty.
It is further expected to boost trade and provide a stimulus to higher growth and employment in the region, Mr Ahwoi said and noted that Ghana's macro-economic performance in recent years has supported the objectives of the ECOWAS monetary programme as seen in the management of budget deficits though most of it was eroded in late 1999.
He called on the various countries to ensure that they pursue appropriate policies that would result in the successful single currency launch.
The macro-economic convergence criteria expected to be observed in two phases, begins with benchmarks relating to the rate of inflation, gross foreign reserves, central bank financing of budget deficits and a budget deficit to GDP ratio.
Mr Ahwoi said these criteria have been designed to impose on participating countries, the discipline that will be necessary to make the single monetary zone a success and cautioned that for most countries the criteria would require some tough policy adjustments that are necessary as well as a fair price to pay for the potential benefits.
Commenting on Ghana's economic situation, the Minister said the recent instability of the exchange rate has raised the debate of what the appropriate exchange regime should be adding that empirical evidence proves the single currency scheme yields more macro-economic stability in countries that opt for it.
He said in the face of large external shocks that are typical for non-oil primary commodity exporting countries like Ghana, the policy response is not always defined.
"A country can choose to minimise the impact of such shocks through accessing foreign credit lines or allowing the shocks to pass through totally into the economy.
"Ghana has chosen a combination of the two by adjusting the prices of crude oil to reflect developments on the external markets."
He said the current moves have come about due to the severe shocks in the latter part of last year that reversed some of the gains made in economic management and appealed for the convergence of public support in the various countries for the cause of a single monetary zone.
Mr Lansana Kouyate, Executive Secretary of ECOWAS asked the Ministers to use the Meeting to examine relevant proposals, for the appropriate recommendation by the Summit of Heads of State which begins tomorrow.
He described the meeting as a decisive step towards the concept of monetary integration and expressed confidence that it will meet the acceptance of the Heads of State and Governments and quicken the pace of the integration of West Africa.
"We expect that the summit will work to see the eight national currencies fused into a second monetary zone."
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GSE All-Share index inches back
Accra (Greater Accra Region) 20 April 2000
The All-Share Index of the Accra bourse on Wednesday, gained 0.11 per cent after it slipped in trading on Monday, which saw a comparatively high number of shares that changed hands.
The Ghana Stock All-Share Index gained 0.82 per cent at 864.79 points from 863.97 points, bringing the total change for the year to 17.47 per cent.
Ten equities sold a total of 121,500 cedis, more than four times the number of shares that have been sold on the bourse in recent weeks. Offers remained far ahead of bids at 2,311,670 and 200,800 shares respectively.
During trading on Monday, total shares that were traded stood at 54,300 while offers were 2,264,670 shares. Total bids were 108,400 shares.
Last Friday, the bourse made a dramatic surge when it leaped by 93.39 points after huge gains by three equities, including Standard Chartered Bank (SCB). On the broader market, four equities made gains and there was no loss.
Accra Brewery Limited (ABL) gained six cedis at 506 cedis and Fan Milk Limited (FML) was up by three cedis at 975 cedis. Ghana Commercial Bank gained five cedis to close at 975 cedis and Home Finance Company (HFC) was richer by two cedis at 807 cedis.
There was negative pressure on nine equities, including SCB, the highest priced equity, and Ashanti Goldfields Company which last week announced a huge loss for 1999.
Market capitalisation was marginally higher at 3,397.85 billion cedis, up from 3,396.55 billion cedis.
The following are the last prices of listed equities in cedis:
ABL 506 +6
AGC 18,600
ALW 2,450
BAT 459
CFAO 38
EIC 1,880
FML 975 +3
GBL 1,450
GCB 975 +5
GGL 976
HFC 807 +2
MGL 200
MLC 150
MOGL 14,800
PAF 294
PZ 800
SCB 27,000
SPPC 150
SSB 1,998
UNIL 2,300
UTC-E 125
CMLT 422
GRi…/