Introduction
The Heads of States of six countries in West Africa, as part of the fast-track approach to integration, decided in Accra, Ghana, April 20, 2000 to establish a second monetary zone to be known as the West African Monetary Zone (WAMZ) by the year 2003. These countries namely The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone signed the ‘Accra Declaration’ which defined the objectives of the zone as well as, an action plan and institutional arrangements to ensure the speedy implementation of their decision. It is envisaged that this zone will be merged with the CFA Franc Zone to form a single monetary zone in West Africa.

At the second summit of Heads of State and Government of the zone held in Bamako, Mali, December 15, 2000 a number of important documents relating to the institutional, administrative and legal framework for establishing the zone were adopted by five countries namely the Gambia, Ghana, Guinea, Nigeria and Sierra Leone, as follows:

- The agreement of the West African Monetary Zone (WAMZ)
- The statutes of the West African Monetary Institute (WAMI)
- The statutes of the West African Central Bank (WACB)
- The provisions on the Stabilization and Cooperation Fund (SCF)
 
The date for the introduction of the common currency originally set at January 1, 2003 was rescheduled in November 2002 to July, 1 2005 in order to give member states more time to fully comply with the convergence criteria.
 
WAMI – The Interim Institution
In order to facilitate the creation of the common Central Bank and the introduction of a common currency, an interim institution, the West African Monetary Institute was set up in Accra, Ghana in January 2001. The Institute which would undertake technical preparations for the establishment of a common West African Central Bank started operations in March 2001.
 
Functions of WAMI
In accordance with its statute, the Institute is mandated to perform the following functions:
 
1. Monitor state of convergence
The WAMI would monitor the state of macroeconomic convergence of the member countries vis-à-vis the prescribed benchmarks (the primary and secondary convergence criteria) and submit an analysis of developments in the participating countries to the decision making body of the zone, the Convergence Council.  The Convergence Reports would contain recommendations on policy measures needed to achieve the required convergence in the participating economies.  These reports would be submitted to the Convergence Council on a quarterly basis for consideration.
 
2. Harmonise regulations and design policy framework 
The Institute would ensure that regulations on financial markets in all member including laws relating to both bank and non-bank financial institutions, are harmonised in order to create a level playing field for all economic operators within the Zone. The WAMI would also ensure the harmonization of monetary policy, banking regulations and accounting practices of all the participating countries of the West African Monetary Zone.  This would allow comparability and formulation of a common monetary policy for all six countries.  In order to ensure effective banking supervision in the zone, WAMI would make proposals on an institutional framework for a centralized supervisory authority.
 
3. Promote regional payment system 
The WAMI would also promote the development of the payments system in the second monetary zone to facilitate the implementation of a common monetary policy.  This would require close collaboration with member central banks and the West African Bankers Association (WABA) to implement a payments system infrastructure that would allow the interlinking of all participating countries.  This would facilitate the smooth execution of monetary policy operations and efficient transfers within the zone.
 
4. Exchange rate mechanism and conversion rate 
The WAMI would study the issue of exchange rate parities within the West African monetary zone and recommend the appropriate exchange rate mechanism and parities for the existing currencies in the second monetary zone.  It would also provide a basis for the setting up of an exchange rate mechanism and the appropriate bands of fluctuation for currencies in the zone.  It would be responsible for determining the value of the common currency and the conversion rates of national currencies into the common currency.

5. Organisation of sensitisation
It would embark on a programme of sensitization of citizens of the participating countries in order to create wide public support for the introduction of the new currency.  This would involve organisation of seminars/workshops etc. to educate the public on the new currency, the ECO. This activity would be undertaken in collaboration with member states which have set up National Sensitisation Committees (NSCs) in this regard.
 
6. Design and technical preparation of the new currency
The WAMI will be responsible for the preparation of background work on the new currency to be issued by the common Central Bank.  This would include the name, determination of par value, denominations, that would facilitate the printing of the new bank notes and coins by the WACB.
 
Modalities for setting up a common central bank
The Institute would also be responsible for the setting up of the common Central Bank, including drawing up the legal framework of the central bank and related institutions, proposals for selecting the Headquarters, the modalities for contributing to the capital, the physical infrastructure and drawing up guidelines for the hiring of key officers.
 
Forster cooperation among countries
The West African Monetary Institute will fulfill a role similar to that played by the European Monetary Institute (EMI).  In this regard, the West African Monetary Institute (WAMI) would provide a platform for intense cooperation between the Central Banks in the West African Monetary Zone, and foster in the countries of the Zone the feeling of ownership of the future common Central Bank.
 
Create enabling environment
The Institute would create the conditions for a smooth transition to the new common currency by ensuring that regulations in all countries are consistent with the introduction of a new currency; prices are quoted in the new currency as well as any other practical issues that would facilitate the smooth introduction of the new currency, and withdrawal of old currencies.
 
Organisatinal structure of WAMI
The West African Monetary Institute is headed by a Director General and has five Departments – Research, Operations, Finance and Administration, Internal Audit and Legal.  The WAMI is supervised by a Convergence Council of Ministers and Governors of Central banks.

Budget
An initial two-year budget was approved for the Institute in December 2000 to cover the period of activities of the Institute, in the years 2001 and 2002.  The budget was subscribed to by Central Banks in accordance with the ECOWAS Budgetary allocation formula which is a coefficient of contribution based on GDP and population.  Since 2002 annual budgets prepared by the Institute are approved by the Convergence Council for funding by the central banks.
 
Work programme
WAMI’s initial two-year work programme, was expended in 2002 to focus on multilateral surveillance of macroeconomic convergence. The other aspects of the work programme include technical, institutional and policy harmonization issues that are to be implemented in order to set up the common Central Bank.
The main elements of the work programme are:
Multilateral Surveillance involving Quarterly monitoring and assessment of country performance with relation to the convergence criteria; Statistical  convergence and harmonization; the development of the payments system; Harmonisation of legal frameworks; design and monetary policy and other frameworks; undertaking effective sensitisation and monitoring the activities at the national level; undertake all institutional, legal and administrative preparatory activities for the commencement of operations of the common central bank.
 
Conclusion
The Institute since its inception has been undertaking relevant activities that would enable it achieve its mandate as contained in its statute.  It is envisaged that it would be able to accomplish its tasks to enable the common central bank to take off smoothly by July 1, 2005 as planned.  It is hoped however, that the member countries would maintain their commitment to meet the convergence criteria and other obligations.