Integration is a must - ECOWAS leaders
Six West African
States to form second monetary union
President Olusegun Obasanjo of Nigeria, President Lansana Conte of Guinea and President Alpha Oumar Konare of Mali, who were in Accra to attend the one-day "ECOWAS Mini Summit on Second Monetary Zone, said there was no time to waste and expressed optimism as well as support for the eventual integration of the Sub-Region.
"We have taken a giant leap forward. We are doing what we should have done sometime back but I am a believer in the adage better late than never," President Obasango said.
Targets set for the eventual monetary integration are not ambitious but realistic. There are doubting Thomases around, yes I know, some believe that we cannot get there but we would tell them that we would get there all right."
He said the integration of the sub-region was very important and has to happen soon "otherwise the world would leave us behind"
"We are getting more de-linked, we cannot have a North - South co-operation because the North is stronger and will cheat us. We will compete when we are strong and that will happen when we are integrated.
President Obasanjo advised that the private sector and civil society should be made to play an active role in the integration of the economies of the Sub-Region.
"It takes the collective desire of our people to make this dream a reality. They should be able to move and trade and live as one people, in such a way that they can contribute to the wealth creation within the Sub-Region. "Private sector and civil society are the ones to concretize the framework put in place today."
President Konare, who is the Chairman of ECOWAS and attended the summit as an observer, said, "the adoption of the declaration is in itself a victory for ECOWAS. The united manner in which we conceived the idea makes integration a reality"
He declared: "I have the conviction that day by day ECOWAS is growing, with the firm political will that we would achieve a lot."
President Konare said recent events have shown that the march towards African Union is not just a dream but a reality.
"If we move individually it will take us a long time to be strong but collectively we will become strong in no time." President Conte said.
Opening the summit, President
Rawlings said recent world economic trends make it imperative for West African
countries to integrate their economies.
He said moves towards establishing
larger economic blocks and the globalisation of the world economy have made it
even more urgent to accelerate the pace of integration. "Unless this is done, our economies
will remain weak, fragmented, uncompetitive and marginalized."
The six member states are easing
towards establishing a common currency outside the CFA zone with an ultimate
aim of a single currency for West Africa by 2004.
President Rawlings said West
African countries have never had cause to dispute the benefits of economic and
social integration of the sub-region.
"We have also recognised the
attendant challenges. Enormous though these
challenges may seem, we should not allow ourselves to be overwhelmed and driven
into a state of inertia.
President Rawlings said the
establishment of a second monetary zone would mean the sub-region would be
dealing with only two currencies as opposed to the nine currently being used. This,
he said, would speed up the establishment of an ECOWAS Monetary Union with a
single currency by the year 2004.
To achieve the target date, a two
stage approach towards the attainment of the convergence criteria, which
constitute the bedrock of establishing the single currency, has been
adopted.
The primary convergence targets
that have been agreed upon include: Single digit inflation by 2004, gross
foreign reserves to cover at least three months of imports by 2000, increasing
to six months of imports by 2003 and Central Bank financing of budget deficit
to be limited to 10 per cent of previous year's tax revenue by the end of 2000.
President Rawlings, however, said
these efforts would come to nought if issues of security and crime, especially
economic, white collar, electronic crime and money laundering, are not tackled
seriously.
"We need to take similar
decisions on these matters as they relate to the Second Monetary Zone by
anticipating the likely pitfalls and taking steps to avoid or pre-empt
them."
He, therefore, suggested the
establishment of an ECOWAS Criminal Intelligence Bureau and said Ghana would be
pleased to assist in its setting up should the need arise.
"I wish to reconfirm Ghana's
commitment to the Fast Track approach as a means of attaining monetary
integration in the sub-region."
President Konare said the
mini-summit proved the community's commitment to meet the challenges facing it,
adding: "We can look forward to the future of our community with serenity".
He said ECOWAS hopes that by its
25th anniversary in May, it would have made some strides that include the
opening of an ECOWAS Court of Justice, ECOWAS Parliament and an organ to
prevent conflicts.
"It is imperative that we
make the integration of our sub-region a reality," President Konare said.
GRi../
Six West African
States to form second monetary union.
Accra (Greater Accra) 21 April
2000
Six West African States outside
the CFA Franc zone on Thursday committed themselves to the creation of a second
monetary union in the Sub-Region by January 2003.
In a communique, dubbed the
"Accra Declaration on Second Monetary Zone", issued at the end of a
one-day Mini-Summit, Ghana, The Gambia, Guinea, Liberia, Nigeria and Sierra
Leone said the union would be based on conditions adopted by the ECOWAS
Authority for the establishment of a single monetary zone.
The ECOWAS Authority decided on a
fast-track approach to ensure an accelerated implementation of integration programmes
at a meeting in Lome in December 1999.
"In recognition of the
difficult adjustment effort needed to achieve the targets set for
macro-economic policy convergence, member states agree to undertake concerted
action to attain the following primary convergence criteria."
They pledged to attain an
inflation rate of not more than nine per cent by the year 2000 and five per
cent by 2003.
They would maintain gross external
reserves to cover at least three months of imports by the end of this year, and
six months by the end of 2003
Heads of State of Ghana, Nigeria
and Guinea and representatives from Sierra Leone, The Gambia and Liberia signed
the declaration, which was witnessed by President Alpha Oumar Konare of Mali,
Chairman of ECOWAS.
The Declaration commits them to
central bank financing of budget deficit to not more than 10 per cent of
previous year's tax revenue.
Budget deficit (excluding grants)
to gross domestic product (GDP) ratio should not be more than five per cent by
2000 and four per cent by 2002.
It said: "six secondary
criteria adopted under the ECOWAS single currency programme will also be
observed in support of the above four criteria.
"Member states undertake to establish
an effective macro-economic data base within each country and at the
sub-regional level as essential support for the multilateral surveillance
mechanism.
"In order to accommodate the
monetary and fiscal pressures that this regional macro-economic harmonisation
programme will exert on individual national economies, member states agree to
establish an appropriate regional compensation and stabilisation arrangement in
support of the commitments to be met under the monetary integration
programme."
Modalities for implementation
would involve the adoption of "the recommendations of the Convergence
Council, including the attached Action Plan, which outlines the programme of
activities to be undertaken in four stages ending in December 2002, to be followed
by the commencement of the second monetary zone in January 2003."
Institutional arrangements to be
made include the establishment of a Summit of Heads of State and Government;
Convergence Council of Ministers and Governors of Central Banks; a Technical Committee
assisted by the Task Force; and a Common Central Bank."
The declaration said, "Member
States recognise the need for strong political commitment and undertake to
pursue all such national policies as would facilitate the regional monetary
integration process.
"In this regard, national
economic management programmes will be formulated and implemented to reinforce
the monetary integration objective.
"This concerted approach is
to be reflected in Member States interactions with all their relevant development
partners".
President Jerry John Rawlings
signed for Ghana, President Olusegun Obasanjo for Nigeria and President Lansana
Conte for Guinea.
Mr Momodu Clarke Bajo and Mr J
Sanpha Koroma, Governors of Central Banks of the Gambia and Sierra Leone,
respectively, signed for their countries while Dr Romeo Horton, an Eminent
Person representing Dr Charles Ghankey Taylor, initialled for Liberia.
GRi../