THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS...
-
Upload
sharlene-stevenson -
Category
Documents
-
view
216 -
download
0
Transcript of THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS...
![Page 1: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/1.jpg)
1
![Page 2: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/2.jpg)
Outline:
2
![Page 3: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/3.jpg)
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
![Page 4: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/4.jpg)
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
![Page 5: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/5.jpg)
Introduction (contd.)• Membership comprises the eight central banks of ECOWAS Member
States:
1) Bank of Cape Verde2) Central Bank of The Gambia3) Bank of Ghana4) Central Bank of the Republic of Guinea5) Central Bank of Liberia6) Central Bank of Nigeria7) Bank of Sierra Leone8) BCEAO (the common Central Bank of the eight countries of UEMOA)
• Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, Togo
5
![Page 6: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/6.jpg)
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
![Page 7: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/7.jpg)
Introduction (contd.)
7
![Page 8: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/8.jpg)
SOME MACROECONOMIC DEVELOPMENTS IN ECOWAS
8
![Page 9: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/9.jpg)
SOME MACROECONOMIC DEVELOPMENTS IN ECOWAS
9
![Page 10: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/10.jpg)
MACROECONOMIC DEVELOPMENTS IN ECOWAS
GROWTH IN BROAD MONEY SUPPLY
2006 2007 2008 2009 2010 2011
ECOWAS 42.0 36.8 44.7 17.4 11.6 15.3
WAMZ 51.5 42.4 55.8 18.6 10.6 17.1
GAMBIA 26.2 6.7 18.4 19.4 13.7 11.0
GHANA 39.1 35.9 40.2 24.7 33.8 33.2
GUINEA 59.4 4.6 39.1 25.8 74.4 9.3
LIBERIA 34.4 38.6 44.4 41.3 31.6 39.5
NIGERIA 43.1 44.2 57.8 17.5 6.9 15.4
SIERRA LEONE 21.4 22.6 22.5 27.5 28.5 22.6
UEMOA 11.4 18.7 9.6 14.2 15.7 11.1
BENIN 18.0 19.8 27.3 7.4 7.3 8.1
BURKINA FASO 10.1 22.9 12.0 21.6 19.2 13.8
COTE D’IVOIRE 10.3 23.6 5.7 17.2 18.6 10.7
GUINEA BISSAU 5.3 24.8 29.5 6.8 29.7 49.5
MALI 8.8 9.3 0.7 14.4 10.4 15.3
NIGER 16.2 23.2 12.1 18.5 21.8 6.1
SENEGAL 11.9 12.6 1.8 11.4 13.7 6.8
TOGO 22.8 16.8 18.1 16.1 16.3 15.9
CAPE VERDE 18.7 9.7 7.9 3.3 6.1 -6.9
![Page 11: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/11.jpg)
STATUS OF MACROECONOMIC CONVERGENCE IN ECOWAS
11
![Page 12: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/12.jpg)
STATUS OF CONVERGENCE
NUMBER OF COUNTRIES THAT MET THE CONVERGENCE CRITERIA
2006 2007 2008 2009 2010 2011 2012
Budget Deficit 6 8 6 3 3 4 3
Inflation 9 7 1 10 9 9 9
External Reserves 1 9 1 11 10 9 9
Central Bank Financing 13 15 13 12 12 13 14
Domestic Arrears 6 5 7 9 9 10 --
Tax Revenue 1 1 1 2 2 3 4
Salary Mass 8 9 7 6 4 4 5
Public Investments 7 7 8 7 6 7 7
Positive Real Interest Rate 6 6 0 10 7 5 6
Real Exchange Rate 12 2 8 11 6 10 1012
![Page 13: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/13.jpg)
STATUS OF CONVERGENCE
13
![Page 14: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/14.jpg)
STATUS OF CONVERGENCE
14
COUNTRY PERFORMANCE ON THE PRIMARY CRITERIA
2006 2007 2008 2009 2010 2011 2012
BENIN 2 4 2 3 4 3 4
B. FASO 2 3 1 3 3 3 3
COTE D’IVOIRE 3 4 2 4 4 3 3
G. BISSAU 2 2 1 3 3 2 3
MALI 2 3 1 3 3 3 2
NIGER 2 3 1 3 3 3 3
SENEGAL 2 2 2 3 3 3 3
TOGO 2 4 2 4 4 3 3
THE GAMBIA 3 2 1 2 1 1 1
GHANA 1 1 0 1 1 1 1
GUINEA 1 2 2 0 0 1 2
LIBERIA 2 2 2 2 1 2 2
NIGERIA 3 3 3 3 2 3 3
SIERRA LEONE 0 1 1 1 0 1 1
CAPE VERDE 2 3 1 2 2 2 2
![Page 15: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/15.jpg)
STATUS OF CONVERGENCE
COUNTRY PERFORMANCE ON THE PRIMARY AND SECONDARY CRITERIA
2006 2007 2008 2009 2010 2011 2012BENIN 4 7 5 7 5 7 8BURKINA FASO 6 6 3 6 6 7 6CAPE VERDE 5 4 4 6 5 5 6COTE D'IVOIRE 5 5 3 7 7 4 6GAMBIA 6 3 1 4 2 2 2GHANA 2 2 2 1 1 3 3GUINEA 2 4 5 4 1 3 4GUINEA-BISSAU 4 2 2 6 6 3 5LIBERIA 4 4 3 4 4 4 4MALI 6 7 4 8 7 7 5NIGER 7 6 4 8 7 8 7NIGERIA 4 6 5 5 3 4 4SENEGAL 6 5 6 8 7 8 9SIERRA LEONE 1 2 1 2 2 3 2TOGO 5 6 4 6 7 5 7
15
![Page 16: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/16.jpg)
STATUS OF CONVERGENCEBUDGET DEFICIT(EXCL. GRANTS)/GDP ≤ 4%
16
![Page 17: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/17.jpg)
STATUS OF CONVERGENCEBUDGET DEFICIT(EXCL. GRANTS)/GDP ≤ 4%
17
![Page 18: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/18.jpg)
STATUS OF CONVERGENCEINFLATION ≤ 5%
18
![Page 19: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/19.jpg)
STATUS OF CONVERGENCEINFLATION ≤ 5%
19
![Page 20: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/20.jpg)
STATUS OF CONVERGENCECENTRAL BANK BUDGET DEFICIT FINANCING/TAX REVENUE- ≤ 10%
20
![Page 21: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/21.jpg)
STATUS OF CONVERGENCECENTRAL BANK BUDGET DEFICIT FINANCING/TAX REVENUE- ≤ 10%
21
![Page 22: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/22.jpg)
STATUS OF CONVERGENCEGROSS EXTERNAL RESERVES ≥ 6 MONTHS 0F IMPORTS COVER
22
![Page 23: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/23.jpg)
STATUS OF CONVERGENCEGROSS EXTERNAL RESERVES ≥ 6 MONTHS 0F IMPORTS COVER
23
![Page 24: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/24.jpg)
STATUS OF CONVERGENCEDOMESTIC ARREARS = 0
24
2006 2007 2008 2009 2010 2011BENIN 0.0 0.0 0.0 0.0 0.0 0.0BURKINA FASO 0.0 0.0 0.0 63.6 0.0 0.0COTE D'IVOIRE yes yes yes 0.0 0.0 0.0GUINEA BISSAU yes yes yes 0.0 0.0 0.0MALI 0.0 0.0 0.0 0.0 0.0 0.0NIGER 0.0 0.0 0.0 0.0 0.0 0.0SENEGAL 0.0 0.0 0.0 0.0 0.0 0.0TOGO yes yes 0.0 0.0 0.0 0.0CABO VERDE 0.0 yes 0.0 0.0 0.0 0.0THE GAMBIA n/a n/a n/a n/a n/a n/aGHANA n/a n/a n/a yes yes yesGUINEA n/a n/a n/a n/a n/a n/aLIBERIA n/a n/a n/a 0.0 n/a 0.0NIGERIA n/a n/a n/a n/a n/a n/aSIERRA LEONE n/a n/a n/a n/a n/a n/a
![Page 25: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/25.jpg)
STATUS OF CONVERGENCETAX REVENUE/GDP ≥ 20 %
25
![Page 26: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/26.jpg)
STATUS OF CONVERGENCETAX REVENUE/GDP ≥ 20 %
26
![Page 27: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/27.jpg)
STATUS OF CONVERGENCESALARY MASS/TAX REVENUE ≤ 35%
27
![Page 28: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/28.jpg)
STATUS OF CONVERGENCESALARY MASS/TAX REVENUE ≤ 35%
28
![Page 29: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/29.jpg)
STATUS OF CONVERGENCEPUBLIC INVESTMENT/TAX REVENUE ≥ 20%
29
![Page 30: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/30.jpg)
STATUS OF CONVERGENCEPUBLIC INVESTMENT/TAX REVENUE ≥ 20%
30
![Page 31: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/31.jpg)
STATUS OF CONVERGENCEPOSITIVE REAL INTEREST RATES
31
![Page 32: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/32.jpg)
STATUS OF CONVERGENCEREAL EXCHANGE RATE STABILITY
32
![Page 33: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/33.jpg)
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
![Page 34: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/34.jpg)
CONCLUSION
34
![Page 35: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/35.jpg)
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
![Page 36: THE WEST AFRICAN MONETARY AGENCY (WAMA) Macroeconomic Convergence and Policy Harmonization in ECOWAS ADDIS ABABA,26 and 27 JULY 2012 1.](https://reader034.fdocuments.us/reader034/viewer/2022051416/56649e025503460f94aed1c7/html5/thumbnails/36.jpg)
36