Ghana meets West Africa Monetary Zone criteria
Ghana has for the first time in its history achieved all the four primary convergence criteria that qualifies it to use the single currency ‘Eco’, along with other six West African states.
As at the end of June 2011, the country had recorded a single digit inflation for a year; gross international reserves of more than $4.0 billion, equivalent to 3.0 months of import cover; and a budget deficit of 2.0 percent.
The Central Bank also did not finance more than 10 percent of the previous year’s tax revenue on budget deficit in addition to gross external reserves of at least three months of imports.
This and some other factors have made it possible for Ghana to meet the criteria set by the West African Monetary Institute for the convergence of their economies.
The objective of the West African Monetary Zone (WAMZ) is to establish a monetary union characterized by a common central bank and a single currency to replace the existing six national currencies. This will encourage inter- trading and maintain price currency.
The five other countries in the zone are also making impressive record at a difficult time for the global marketplace.
Ghana, Guinea, Nigeria, Gambia, Sierra Leone and Liberia are due to reach the final convergent point before the year 2015 and issue a common currency to be called the Eco. The processes leading to this goal are already in motion.
Even though some countries including Ghana have been able to attain the four primary convergence criteria set by WAMZ, some constitutional ratifications must be completed before the West Africa Central Bank finally comes on stream to issue the new spending money, Eco.
By: Winifred Ampiaw, e.tv Ghana
Accra, May 17, 2012
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