STATEMENT BY THE GOVERNOR, BANK OF SIERRA LEONE, MR ...

STATEMENTBYTHE GOVERNOR, BANK OF SIERRA LEONE,MR. SHEKU S. SESAY, ON THE OCCASION OF THE 26 THMEETING OF THE COMMITTEE OF GOVERNORS OF THEWEST AFRICAN MONETARY ZONE, HELD IN FREETOWN,SIERRA LEONE, JANUARY 19, 2012

Honourable Governors of the Central Banks of WAMZGovernor of BCEAORepresentative of The ECOWAS Commission,DG, WAMADG, WAIFEMDistinguished DelegatesMembers of the Fourth Estate,Distinguished Ladies and Gentlemen1. It gives me great pleasure to welcome you all to this historicand scenic city of Freetown, the capital of Sierra Leone, on theoccasion of the 26 th Meeting of the Committee of Governors ofthe West African Monetary Zone (WAMZ). While I hopecolleague Governors and all other delegates had a pleasant tripto Freetown, I would like to take this opportunity to convey, onbehalf of the Board and Management of the Bank of SierraLeone, fraternal greetings from H.E. the President, theGovernment and people of the Republic of Sierra Leone on yourarrival to participate in the deliberations of this meeting. On aspecial note, I would like to congratulate Dr. Lounceny Nabe,Governor, Central Bank of the Republic of Guinea (GBRG) andoutgoing Chairman, Committee of Governors of the WAMZ forthe exemplary manner in which he has steered the affairs ofthe Committee and distinguished himself in the handling of2

sensitive and otherwise difficult challenges that emerged duringhis tenure of office as Chairman. We shall always count on hiscontinued support both to this Committee and the aspirationsof our sub-regional endeavours.2. Honourable Governors, this being my first time of hosting themeetings of this august body since I took over as Governor ofthe Bank of Sierra Leone, I feel reassured by the strong showof the Governors, which is a clear manifestation of theirindividual and collective commitment to our shared vision of amonetary union and a single currency in the WAMZ.3. In this regard, as we progress on the road to achieving thetarget goal of a durable and sustainable monetary union and asingle currency in the WAMZ by 2015, I would like to reaffirmSierra Leone’s total commitment to both the WAMZ singlecurrency objective and the ECOWAS Monetary CooperationProgramme.4. Honourable Governors, holding the 26 th meeting of theCommittee of Governors of the West African Monetary Zone inSierra Leone this year is significant in two ways: First, 2012 isan election year in Sierra Leone and the country will be holdingthe Presidential, Parliamentary and Local Council electionsduring the course of the year. Second, as we approach thedeadline date for the introduction of the single currency on orbefore January 1, 2015, recent developments in the globalenvironment, notably the Euro zone debt crisis and the surge in3

global food and fuel prices have highlighted the fragility ofeconomic conditions in the WAMZ member countries withserious implications for potential socio-political instability. Thishas proved the process of devising and implementing reformsmuch more difficult than foreseen.5. Honourable Governors, the task ahead of us is enormous. Weare meeting here today to evaluate progress that has beenmade so far, towards the Convergence programme by eachMember State and to chart the way forward. As we proceed,we must examine strategies to address the challenges ofgrowing fiscal deficits, the promotion of fiscal sustainability andunemployment in our sub-region, against the backdrop of thethreat of global recession. We cannot afford to enter into amonetary union fraught with all the frailties that are currentlythreatening the viability and sustainability of the Euro Zone. Wetherefore have to work very hard to put in place measures thatwill deliver a monetary zone and a single currency devoid ofsuch potential problems by adopting effective expenditurerationalization and non-inflationary methods of financing ourvarious development projects.6. Economic performance in the WAMZ is expected to remainencouraging, attributable partly to increased activities in theagricultural, industrial and services sectors in the MemberStates. New mining production in a number of WAMZ countrieslike Sierra Leone holds the prospect of contributing to stronger4

growth in the sub-region. Indications are that strongmacroeconomic performance is reflected in the Member States’compliance with the macroeconomic convergence criteria.Despite the improved Zonal performance, challenges stillremain particularly relative to sustaining fiscal consolidation andefforts to contain inflation.7. I am pleased to note the satisfactory progress being made sofar, in the implementation of the Payments System project inthe four beneficiary countries, which culminated in the go-livedate on 6 th December, 2011 for some components, in theGambia. Sierra Leone, like Guinea and Liberia, are also makingprogress, as the construction of Disaster Recovery sites andinfrastructural upgrading are being addressed. I wouldtherefore like to recommend that a fast-track approach to theimplementation of the project be adopted such that we do notmiss the deadline of 2012. The WAMZ College of Supervisorsalso met, to share experiences and discuss problems, and jointsupervision of regional banks has commenced and the feedbackfrom such missions has been useful. Progress is also beingmade in other areas including Trade and Financial integration inthe zone.8. Going forward, let me also underscore the importance ofconsidering the governance and administrative structures of ourinstitutions, in addition to considering how the functions of theinstitutions can be rationalised in order to bring about greater5

efficiency and cost effectiveness in the entire process. I wish toappeal to us all for the spirit of unity of purpose, firmcommitment and dedication to the cause to ensure ourobjective is met by 2015.9. Sierra Leone continues to make efforts geared toward achievingfull compliance with the WAMZ’s convergence programmethrough implementation of reforms. To this end, the currentNational budget is WAMZ compliant as it was designed andformulated to address the challenges of excessive fiscal deficitand promotion of fiscal sustainability through effectiveexpenditure rationalization and non-inflationary financing ofinfrastructure projects. The Bank of Sierra Leone also,continues to further the implementation of the Financial SectorDevelopment Programme (FSDP) and benefited from WorldBank and African Development Bank grants. The BSL Act 2011was enacted into law to strengthen the central bank’sindependence in managing monetary policy. Similarly, theBanking Act 2011 was passed into law to foster the stability andsoundness of the financial sector through strengthenedsurveillance. In another development, a policy rate wasintroduced into the monetary policy framework to signal theBank’s policy stance.10. In pursuance of institutional reform, a commercial court wasestablished to fast track commercial litigation. A creditreference bureau was also set up in 2011 to address the6

problem of information asymmetry in the financial markets andchannel credit flows to priority sectors of the economy and itsoperation will soon be extended to the rural financial sector topromote savings mobilization and rural financial intermediation.Regarding the implementation of the payments system projectin Sierra Leone, several milestones have been achieved andtraining programmes for staff of the Central Bank andcommercial banks have been organized as a way to roll-out theproject against the 2012 deadline.11. On that note, I would like to conclude my remarks byreiterating the need for Member States to continue to improveand sustain their performances on the convergence scale. Ourdiscussions and recommendations at this meeting will informthe Agenda of the WAMZ Convergence Council meetingscheduled for tomorrow. Dear colleagues, I would thereforelike to request that we carefully examine the recommendationspresented by the Technical committee so as to enable us toadvise the Convergence Council on steps needed to be takentowards achieving our shared vision of economic and monetaryintegration in the Zone.12. I wish you a pleasant stay in Sierra Leone and fruitfuldeliberations. I thank you for your kind attention.7