President Kabbah back home from Abuja Summit
By Yusuf Alghali

The government of Sierra Leone has received high commendation for having performed creditably and making prompt contributions towards the success of the second West African Monetary Zone Programme, notwithstanding the country's recovery agenda and economic difficulties.
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Addressing the Summit of Heads of State of the West African Monetary Zone (WAMZ) held in Abuja, Nigeria on Friday 29 August, 2003, ECOWAS Executive Secretary, Mohamed Ibn Chambas, observed that in spite of its conflict situation and the on-going reconstruction and rehabilitation efforts, Sierra Leone had done extremely well in meeting its obligations to the convergence process.

He was, however, concerned that Liberia, also because of its own conflict situation, had not been part of the regional monetary integration process, but he expressed hope that with the gradually stabilising situation, Liberia would soon join the other West African nations in the process.

Mr. Chambas recalled that during last year's summit in Guinea, Conakry, a decision was reached to shift the date for a regional common currency to 2005, as none of the countries had met all four of the required convergence criteria.

Mr Chambas was nonetheless pleased to report the notable improvements made by some member countries in meeting most, if not all, of the criteria, according to the latest report, but called for more effort to be made in improving revenue mobilisation, revenue controls as well as pursuing more prudent fiscal polices. The Ecowas scribe expressed the hope that this time round countries would do their utmost to meet the scheduled date of July 2005.

President Kabbah, in his remarks, noted that the once volatile West African sub-region is gradually achieving the much-desired political stability which is essential for economic growth and development. For this, he expressed gratitude to the government and people of Nigeria for the sacrifice it had made and continues to make in human, financial and material terms in order to restore security and political stability in the region.

He also registered his appreciation of the efforts of President John Kuffour of Ghana, who is also Chairman of ECOWAS; retired General Abdulsalam Abubakarr, ECOWAS chief mediator on Liberia and the Executive Secretary of Ecowas, Dr. Ibn Chambas, for ensuring a durable solution to the Liberian conflict. Given the hard lessons learnt during the decade-long conflict and the general climate of instability, President Kabbah said Sierra Leone wholeheartedly welcomed the recent positive developments in Liberia, which signal renewed hope for security in the sub-region.

He stated that internal conflicts within the member states of the sub-region disrupt economic progress, increase poverty and create a lot of suspicion between governments, not to mention the potential threat to foreign investment.. In light of the aspirations for regional monetary union, he said, only the promotion of good governance will bring about added impetus to the realization of the dream of free enterprise and trade, free movement of persons, economic co-operation and growth.

"My Government is working strenuously to lay solid foundations to match its commitment to the introduction of a common currency in the West African monetary zone by July 2005" the President affirmed, but stated that for a country just emerging from "a devastating civil conflict" it would not be an easy task. However, he indicated that his government had provided the political will by ensuring that the legal and institutional frameworks and arrangements were complete.

The Sierra Leone parliament had ratified the statutes for the creation of the West African Monetary Zone and the establishment of the West African Central Bank. In addition, he reported that his government had endeavoured to pay its contributions regularly to the Operational Funds of the West African Monetary Institute (WAMI) and the Stabilization and Co-operation Fund and had almost finalized arrangements to settle its obligation to the capital subscription of the West African Central Bank.

President Kabbah was also pleased to report that Sierra Leone's private sector was gradually responding to the promotion of economic growth, resulting in improved performance on the macro-economic front, with inflation still within the single digit. However, he disclosed that the budget deficit ratio had not beenachieved owing to the difficult socio-economic circumstances bedevilling the post-conflict country.

While underlining the importance of fiscal discipline in satisfying the convergence criteria, Dr. Kabbah said government had adopted the Medium Term Expenditure Framework (MTEF) to "rationalize expenditure on the basis of a three-year rolling programme, in line with the available resource envelop". Government, he went on, had also introduced a participatory approach in the budgetary process from preparation to execution and implementation.

The President further underscored the importance of sensitisation, especially for those in rural areas who still cannot avoid the temptation of referring to the now obsolete pounds, shillings and pence in counting their monies. In this regard, he referred to his launching of the national sensitization programme in February of this year, with a pledge to provide substantial resources to the national sensitization committee to enable it reach out to all stakeholders throughout the country.

President Kabbah concluded by emphasising the fact that political, economic and social stability in the sub-region could only be achieved, if all concerned were prepared to make the necessary sacrifices and commitments.

The new Chairman of the West African Monetary Zone and Summit host, President Olusegun Obasanjo, was delighted that the meeting provided an opportunity for Heads of State to re-affirm their commitments to move the single currency programme forward.

President Obasanjo said the landmark decision in Conakry last year made it possible for countries to adjust their macro-economic policies and programmes which had resulted in significant progress. He joinedSecretary General Chambas in emphasising that "more needs to be done", while also calling for the preparation of country programmes spelling out modalities for meeting the monetary integration criteria on time.

President Obasanjo also re-echoed President Kabbah in reiterating the importance of peace and security, harmony and solidarity for the achievement of a common currency for West Africa

A communiqué issued at the end of the summit also called for member states to strengthen their management systems and ensure effective implementation of the relevant policy measures outlined in their 2003 budgets. Member countries were also enjoined to sustain their efforts in the implementation of the qualitative aspects of the convergence programme.

According to the communiqué, "the West African Monetary Zone Exchange Rate Mechanism" (WAMZ/ERM) should be renewed from January 2004 in support of the WAMZ convergence process. The mechanism would continue to provide useful information on the effectiveness of fiscal and monetary policies under the WAMZ programme. Experts from the national Central Banks were urged to meet to prepare the modalities of the mechanism to enable WAMI circulate to member countries a revised operational manual by the end of October 2003. Member Central Banks should continue to provide regular and timely data on exchange rate developments in the Zone to WAMI.

"In order to guarantee the independence of the West African Central Bank (WACB) and strengthen its monetary policy management, the Summit endorsed the proposed changes by the Convergence Council to the Statute of the Bank adopted in 2000. The Summit of WAMZ will officially sign the new Statute in December 2003.

"The Summit took note of technical and financial support being given by several international organizations to the West African Monetary Institute for the implementation of the WAMZ programme. While welcoming such healthy partnerships, it advised member countries of the Zone to take advantage of the opportunities given to strengthen their preparations for the monetary union.

"The Summit endorsed the proposal to undertake a study on payment systems development in the WAMZ, to among others, improve the transmission mechanism of the monetary policy of the WACB. It urged the technical officials to expedite the process of conducting the study to enable implementation of appropriate proposals commence as early as possible."

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