Second monetary zone created

Six members of the Economic Community of West African States (ECOWAS) agreed
at a two-day summit that ended on Saturday in Bamako to create a West African Monetary Zone.

The six, The Gambia, Ghana, Guinea, Gambia, Liberia, Nigeria and Sierra Leone, are not members of the CFA franc zone. A seventh non-CFA zone country, Cape Verde, has postponed its entry into the new monetary union.

Initial seed money of US $50 million has been earmarked for a stablization fund for the monetary regime.

Eight other countries - seven former French colonies and Guinea-Bissau - form the West African Economic and Monetary Union (UEMOA). Their common currency, the CFA franc, is backed by the French treasury.

The creation of the second monetary zone is intended to eliminate the multiplicity of currencies in West Africa. The two zones are to be fused by 2003. To ease that transition, the leaders agreed to set up a West African central bank in 2002. An intermediary body, the West African Monetary Institute, is to be set up in 2001 with a budget of US $5.4 million pending the bank’s establishment.

Malian President Alpha Oumar Konare, who has reportedly called for a West Africa Federation, has had his mandate as chairman of ECOWAS renewed for another year, a measure which would enable him to see through part of the integration process.