Nestor,
Disclaimers have a habit of entering the Executive Board with humility and,
more often than not, exit the Board Room as arrogant policies.
Sidi Sanneh.
Disclaimer: None
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IMF Disclaims Report Condemning Single Currency
This Day (Lagos)
January 30, 2003
Posted to the web January 30, 2003
Mike Oduniyi
Lagos
The on-going debate on the workability of a single currency for the West
African sub-region, took another turn yesterday as the International
Monetary Fund (IMF) has disclaimed a report submitted by its researchers
opposing the project.
The debate was actually sparked off two weeks ago by the report of three IMF
researchers, Xavier Debrun, Paul Masson and Catherine Patitillo, who
submitted among other observations, that a monetary union with Nigeria would
not be in the interest of other member nations of the Economic Community of
West African States (ECOWAS) unless it is accompanied by effective
discipline in Nigeria's fiscal policies.
However, in a statement issued by Thomas Dawson, IMF Director, External
Relations and made available to THISDAY, the Fund said the research report
did not represent its policy.
"The paper, like all IMF working papers, contains a prominent disclaimer
that its views are those of the authors and do not necessarily represent
those of the IMF or IMF policy," said Dawson.
He said neither the IMF Executive Board, which represents the views of the
Fund's 184 member countries, nor IMF staff responsible for Nigeria had drawn
the conclusions contained in the report.
The Nigerian government had reacted swiftly when the research report was
first published, stating that no amount of blackmail would stop the West
African Monetary Union project. The Permanent Secretary in the Ministry of
Economic Integration and Cooperation in Africa, Dr. Brownson Dede, had
described the report as calculated attempt to scuttle moves to integrate and
develop the economies of countries in the sub-region.
Brownson said Nigeria has put in more efforts to herald the birth of a
single currency in West Africa and that she would reject any attempt to
downgrade the efforts from any quarters or institutions.
From Accra, Ghana-based West African Monetary Institute (WAMI) came a
further reaction to the report when a senior official of the institute, Mr.
David Asante, maintained that West African countries were determined to
press ahead with the launch of a single currency for the sub-region despite
any criticism.
According to Asante, the birth of a single currency would enhance the
region's overall production, adding that nobody could convince West African
countries that a single African currency is not a good idea.
The West African Monetary Union created few years ago by the Economic
Community of West African States (ECOWAS) in a bid to promote trade and
commerce among the 16-members states, plans to achieve a single currency by
2004. Several regional blocs in the world have been considering the
formation of a single currency following the successful launch of the euro
across 12 European countries.
Supporters say a single currency can boost intra-regional trade by
minimising transaction costs, and is likely to be more stable than
individual currencies. But some others argued that it would also leave the
countries' econo-mies ruled by one Central Bank vulnerable should emergency
action - such as devaluation - be required.
The research report being disowned by IMF had specifically taken a swipe at
Nigeria warning other members-countries of the West African Monetary Union
that Nigeria will be an unsuitable partner due to corruption and
uncontrolled government spending.
The IMF spokesman however, confirmed that the Fund's Executive Board,
through its public information notice, had expressed concern about Nigeria's
expansionary spending policies. "The board also urged the (Nigerian)
government to take further steps to establish a single, unified foreign
exchange market for the naira."
"The related IMF staff report about the economy, released on January 3, did
state that fiscal discipline and unification of the naira foreign exchange
market would need to be achieved before Nigeria would be in a position to
join the proposed West African Monetary Zone," said Dawson.
IMF said a decision by any of its member-countries to join a currency union
or to adopt any other foreign exchange rate arrangement is a question of
national sovereignty.
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