STATEMENT BY DR TEMITOPE W. OSHIKOYA, DIRECTOR GENERAL OF THE WEST AFRICAN MONETARY INSTITUTE ON THE OCCASION OF THE SIGNING OF THE PROTOCOL OF AGREEMENT

The Honourable Vice President,

Ladies and Gentlemen,

It gives me great pleasure to be among my colleagues and friends at African Development Bank (AfDB) today to sign the Protocol of Agreement between the African Development Fund and the West African Monetary Institute (WAMI) in respect of the Grant for the development of the payment systems in the member countries of Gambia, Guinea and Sierra Leone.  Your Honourable Vice President, on behalf of the Convergence Council of Ministers and Governors of the Central Bank, I would like to express the appreciation of the West African Monetary Zone (WAMZ) and its Institute, WAMI, to the President, Board of Directors, Management and Staff of the AfDB for the Grant of UA 14 million (USD23 million).

The primary objective of creating the WAMZ is to promote trade, growth and eradicate poverty in the sub-region. The project is designed to lead to the creation of a common central bank, the West African Central Bank (WACB) and the introduction of a single currency for the member countries of WAMZ. This Grant therefore represents a watershed in the WAMZ Project. It marks another major leap in our march towards a Monetary Union and a significant step in the establishment of a robust, safe and efficient payments system that can act as a model for the African Continent in general and West Africa, in particular.  For the three countries it means a direct benefit for participation in the WAMZ Project and another strong reason to demonstrate their continued commitment to the WAMZ  Monetary Union Project.

This project, when fully implemented, will go a long way in addressing the challenges of payment systems in the Gambia, Sierra Leone, and Guinea. The upgraded payment system should facilitate control of credit and systemic risks, leading to increased confidence in the security and reliability of payment; minimisation of transaction costs; availability of modern infrastructure to support domestic and cross-border funds transfer; improved monetary/liquidity management and promotion of economic activities. It will also promote efficient allocation of resources, financial intermediation, and the efficacy of monetary policy.

Your Honourable Vice President,

Please permit me to use this opportunity to outline the activities of WAMI and how we can further strengthen collaboration between our two institutions. WAMI was set up in 2001 as a precursor to the establishment of the WACB, and charged with the mandate of actualizing the WAMZ project. The major responsibilities include, monitoring the state of macroeconomic convergence of the member countries vis-à-vis the prescribed benchmarks; harmonising regulations on financial markets in the member countries; Promoting the development of the payments system in the member countries in order to facilitate the smooth execution of monetary policy operations and efficient transfers within the zone; designing  an exchange rate mechanism; and, undertaking  a sensitisation programme to educate all the stakeholders in the zone on the monetary integration process.

I have the   honour to inform you that significant progress is being made towards the monetary union. WAMI has been discussing with various complexes of the Bank on possible areas of further collaboration. The areas identified include: Statistical Harmonisation and Database Development; Financial Sector Integration in the WAMZ; Preparation towards the introduction of the single currency- Eco; and programmes for promoting regional development and integration, as they will ensure an effective integration of the West African countries into one single economic space. Madam Vice President, your assistance in actualizing and strengthening further collaboration will be highly appreciated by the Board and Management of WAMI.

Permit me to conclude by assuring you that with the signing of the Protocol of Agreement, the current project will be efficiently executed and implemented within budget and implementation timeframe.

With these remarks, Honourable Vice President, it gives me great pleasure to sign with you this Protocol of Agreement.