West African economic integration is taking center stage at statutory meetings of the West African Monetary Zone (WAMZ) that are being jointly hosted by the Central Bank of Liberia and the Ministry of Finance and held from 27 July to 4 August 2017 at the Central Bank of Liberia Auditorium.
The Executive Governor of the Central Bank of Liberia, Hon. Milton A. Weeks delivered the keynote address at the opening of the technical meetings on Thursday. The Executive Governor commended the efforts by member states of the Economic Community of West African States (ECOWAS) to enhance intra-regional trade and a customs union, under the ECOWAS Trade Liberalization Scheme and the Common External Tariff, respectively. He also cited notable progress made under various policy harmonization programmes, including balance of payments and attempts made in defining a common monetary policy and exchange rate regime.
In his address, the Executive Governor recounted how, since the formation of ECOWAS in 1975, resources have been deployed in developing an integration framework. He said member states had also endeavoured to improve the macroeconomic fundamentals through a number of structural adjustment programmes and policy reforms, although the Governor acknowledged that more recently sustaining macroeconomic stability had proved elusive due to the effects of recent global dynamics and uncertainties.
In reflecting on the Liberian economy and the steps that are being taken to conform to the monetary cooperation programme, the Central Bank Executive Governor said that Liberia had recorded a remarkable growth rate of 8% per annum between 2006 and 2013, with inflation within the single digit range and a relatively stable exchange rate.
According to Governor Weeks, this positive trend in Liberia’s economy changed during the 2014/15 fiscal period, marked by a considerable drop in Liberia’s gross domestic product (GDP), followed by a further decline in 2016. Notwithstanding the economic decline, the Governor maintained that Liberia has made best efforts to remain in compliance of ECOWAS Monetary Cooperation Programme. He said the CBL is working towards establishing a monetary policy committee and addressing its dual currency regime in the medium term to be in harmony with the West African monetary policy frameworks.
The Governor was hopeful of a favourable outlook due to the momentum generated by the global economic recovery but admonished member states to improve their fiscal policies by diversifying their revenue sources and minimizing the effect of future external shocks to their economies. The Governor also called on member states to address their inability to sustain performance under the macroeconomic convergence programme and rethink the West African integration process, given persistent exogenous shocks and structural bottlenecks.
Also speaking during the opening of the WAMA conference was WAMA’s director-general, who re-enforced Governor Weeks’ assertion that ECOWAS member states had registered minimal growth in 2016 of only 0.1 percent on an aggregate basis. The representative of the ECOWAS Commission, Mr. Gideon Gbappy, for his part, underscored the collaboration and commitment of ECOWAS and WAMA to working for economic convergence, but reckoned that the 2020 timeframe for a single West African currency was a ‘tall order’.
The Council of Governors meeting will receive the report of the technical meetings at their meeting next Thursday, August 3rd and will then report to the Convergence Council, made up of Ministers of Finance and Governors of Central Bank of the member states at the Convergence Council meeting on Friday, August 4, 2017