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WAMA: Advancing Monetary Integration in ECOWAS

Exploring the transformation of WACH to WAMA in 1992 by ECOWAS for monetary integration. Objectives, membership, and macroeconomic developments within ECOWAS discussed. Measures for policy harmonization and bright prospects for EMCP highlighted.

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WAMA: Advancing Monetary Integration in ECOWAS

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  1. Outline:

  2. Introduction • WAMA: Established in 1992 by the Authority of ECOWAS Heads of State and Government (Per Decision A/DEC./7/92) • A specialised autonomous body of ECOWAS, concerned with monetary Integration and payments arrangement

  3. Introduction (contd.) • Through a transformation from West African Clearing House (WACH) • Why was the transformation necessary? • The transformation had become necessary following: • the adoption of the ECOWAS Monetary Cooperation Programme (EMCP) in 1987; and • the need for an entity to handle the implementation of this Programme in addition to the multilateral payments related issues; • WACH originally established in 1975:- • to provide a mechanism through which members could use their domestic currencies for current and capital account transactions within the West African region; • The objective had been to encourage intra-regional trade and help member countries to economize on the use of foreign exchange.

  4. Introduction (contd.) • Membership comprises the eight central banks of ECOWAS Member States: • Bank of Cape Verde • Central Bank of The Gambia • Bank of Ghana • Central Bank of the Republic of Guinea • Central Bank of Liberia • Central Bank of Nigeria • Bank of Sierra Leone • BCEAO (the common Central Bank of the eight countries of UEMOA) • Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, Togo

  5. Introduction (contd.) • OBJECTIVES • promote trade and financial transactions; • encourage exchange rate liberalization among member States; • promote monetary cooperation and consultation among member States; • assist member States in the harmonization and coordination of their monetary and fiscal policies; • ensure the monitoring, coordination and implementation of the ECOWAS Monetary Cooperation Program (EMCP); • encourage the pursuit of appropriate macroeconomic policies conducive to market-determined exchange and interest rates; • initiate and promote policies and programmes aimed at achieving monetary integration within the region; and • ensure the establishment of a single monetary zone in West Africa by creating the necessary conditions leading to implementation of uniform monetary policy and creation of a single currency.

  6. Introduction (contd.)

  7. SOME MACROECONOMIC DEVELOPMENTS IN ECOWAS

  8. SOME MACROECONOMIC DEVELOPMENTS IN ECOWAS

  9. MACROECONOMIC DEVELOPMENTS IN ECOWAS

  10. STATUS OF MACROECONOMIC CONVERGENCE IN ECOWAS

  11. STATUS OF CONVERGENCE

  12. STATUS OF CONVERGENCE

  13. STATUS OF CONVERGENCE

  14. STATUS OF CONVERGENCE

  15. STATUS OF CONVERGENCEBUDGET DEFICIT(EXCL. GRANTS)/GDP ≤ 4%

  16. STATUS OF CONVERGENCEBUDGET DEFICIT(EXCL. GRANTS)/GDP ≤ 4%

  17. STATUS OF CONVERGENCEINFLATION ≤ 5%

  18. STATUS OF CONVERGENCEINFLATION ≤ 5%

  19. STATUS OF CONVERGENCECENTRAL BANK BUDGET DEFICIT FINANCING/TAX REVENUE- ≤ 10%

  20. STATUS OF CONVERGENCECENTRAL BANK BUDGET DEFICIT FINANCING/TAX REVENUE- ≤ 10%

  21. STATUS OF CONVERGENCEGROSS EXTERNAL RESERVES ≥ 6 MONTHS 0F IMPORTS COVER

  22. STATUS OF CONVERGENCEGROSS EXTERNAL RESERVES ≥ 6 MONTHS 0F IMPORTS COVER

  23. STATUS OF CONVERGENCEDOMESTIC ARREARS = 0

  24. STATUS OF CONVERGENCETAX REVENUE/GDP ≥ 20 %

  25. STATUS OF CONVERGENCETAX REVENUE/GDP ≥ 20 %

  26. STATUS OF CONVERGENCESALARY MASS/TAX REVENUE ≤ 35%

  27. STATUS OF CONVERGENCESALARY MASS/TAX REVENUE ≤ 35%

  28. STATUS OF CONVERGENCEPUBLIC INVESTMENT/TAX REVENUE ≥ 20%

  29. STATUS OF CONVERGENCEPUBLIC INVESTMENT/TAX REVENUE ≥ 20%

  30. STATUS OF CONVERGENCEPOSITIVE REAL INTEREST RATES

  31. STATUS OF CONVERGENCEREAL EXCHANGE RATE STABILITY

  32. Some Policy Harmonisation Measures • Policy Harmonisation in respect of the following: • Monetary Policy Frameworks; • Regulatory and Supervisory frameworks of banks and other financial institutions; • Accounting and Financial Reporting frameworks for banks and non-bank financial institutions, the • Legislations governing current and capital account transactions; and • Balance of payments statistics, etc. • Stabilisation of Exchange Rates/Exchange Rate Mechanism

  33. CONCLUSION

  34. Conclusions • Bright prospects for the EMCP, despite the challenges • The political authorities are exhibiting a renewed commitment towards speedy implementation of the project; • The implementing institutions are maximizing synergy through enhanced collaboration • Member countries are more than ever determined to accelerate or at least sustain the implementation process; • Considerable progress has been made under the programme: • member countries have stepped up efforts to achieve fiscal consolidation and harmonize their fiscal, monetary and financial policies; • the liberalization of the current and external capital accounts are in progress; • the framework has been laid for the architectural design of the WAMZ project • The economies of UEMOA are converging steadily

  35. Thank you for your attention

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