Minister of State for Finance, Mr. Yerima Ngama
Prospects for the proposed take-off of a single currency regime by 2015 remained blurred as none of the six member countries of the West African Monetary Zone (WAMZ) including Nigeria, satisfied the required macroeconomic convergence criteria last year.
The drive towards the adoption of a single currency regime in the West African sub-region was originally fixed for 2003 but this had been postponed three times largely because of “mixed” progress among member countries in attaining the set criteria.
Speaking in Abuja at the opening of the 34th Technical Committee meeting of the WAMZ, Minister of State for Finance, Mr. Yerima Ngama, said performance of member nations on the convergence scale had worsened remarkably from a score of 79.2 per cent in June 2011 to 62.5 per cent in 2012, adding that there was urgent need for more collective efforts towards the actualisation of the new (2015) date for the monetary union.
He said member states would have to double their efforts in strengthening fiscal performance through enhanced domestic revenue mobilisation and rationalising public expenditure.
The minister called for reforms and efficiency in tax administration as well as broadening the tax base–and ensuring effectiveness and productivity in government expenditure in member countries towards the attainment of the single currency objective.
He added that the Federal Government would, however, continue to give its full political support to ensure the success of the WAMZ programmes.
Acting Director General, West African Monetary Institute (WAMI), Mr. John Kitcher, said inflation and fiscal deficit criteria remained the most challenging parameters for member states to comply with.
He, said inflation remained subdued at an average rate of 12.6 per cent in June 2012 against 11.6 per cent recorded same period in 2011, noting that although fiscal operations had improved last year, as average fiscal; deficit excluding grants declined to 1.8 per cent from 2.2 per cent in 2011, helped by domestic revenue mobilisation and expenditure management, none of the countries met all the four primary convergence requirements in 2012.
Meanwhile, Deputy Governor (Economic Policy), Central Bank of Nigeria (CBN), Mrs. Sarah Alade, said the aim of the WAMZ was to fast-track all relevant arrangements needed to achieve an ECOWAS Monetary Cooperation programme (EMCP) preparatory to the set-up of a sustainable monetary union.
She said member nations’ capacity to meet the convergence criteria had been adversely affected by the crisis in the Euro Zone, which had caused unstable capital inflows and rising unemployment in the West African sub-region.
Alade, however, insisted that developments in the Euro Zone buttressed the need for countries to achieve and maintain the required level of macroeconomic stability before and after the formation of a monetary zone.
Notwithstanding the past failures in kick-starting the single currency at the set dates, the CBN deputy governor, cautioned however, against taking hasty decision in achieving the objective.
“I call on the experts to subject this process and the timetable to thorough scrutiny and evaluation with a view to establishing a sustainable monetary union in our sub-region,” she said.
However, Kitcher, said the WAMZ was faced with how to promote sustained economic growth which creates jobs as well as fine-tuning policies to contain possible new crisis or significant imbalances in the future with respect to the Euro Zone crisis.
He said: “The key issues are how to ensure sustainable fiscal policies under a single currency regime and promote sound and stable financial systems.”