This is a continuation from last week on the august discourse on the monetary institutes and policies that will ultimately see West Africa integrated under a single currency.

This week we seek to proceed with the role and functions of the West African Monetary Institute (WAMI).

Introduction
The heads of state 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 was adopted by five countries; namely the Gambia, Ghana, Guinea, Nigeria and Sierra Leone, as follows:

- the agreement on the West African Monetary Zone (WAMZ);
- the statutes of the West African Monetary Institute (WAMI);
-  the statutes of the West African Central Bank (WACB); and
- 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. A new date of December 1, 2009 has now been set.

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 the 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 members 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 payment system infrastructure that would allow the interlinking of all participating countries. This would facilitate the smooth execution of monetary policy operations.