• Seeks more tax
The Economic Community for West African States(ECOWAS) Commission has ordered all member states to reduce their cost of governance and look for addditional sources of taxation.
The Director of Multilateral Surveillance, ECOWAS Commission, Lassane Kabore, who represented the President of the ECOWAS Commission, said this yesterday in Abuja at the 34th Technical Committee’s meeting of the West African Monetary Zone (WAMZ).
He urged “all ECOWAS member States, including the WAMZ countries, to increase domestic revenue mobilisation through effective implementation of programmes aimed at ensuring improved tax payer voluntary compliance, effective tax administration and broadening of the tax base, as well as minimising the operational cost of governance.”
He was unhappy that the performance of the WAMZ member countries with regards to the secondary convergence criteria, “was slightly above 25 per cent, bringing to the fore the problems of low tax yield and high operational costs of governance in the entire ECOWAS sub- region.”
Kabore, said as the sub-region moves towards the agreed launch date of 2015 for the second regional currency, the ECOWAS Commission expects “that the WAMZ Member States satisfy the macroeconomic convergence criteria, especially the primary criteria, and sustain their performance on the convergence scale.”
Though he admitted that achieving this goal has been a daunting challenge for the six member countries of the WAMZ, he lamented that “none of the six WAMZ countries met the required targets of the four primary criteria.”
The ECOWAS commission was also displeaed that only “three member countries satisfied both the inflation and fiscal deficit criteria, while five countries met the Central Bank deficit financing criterion. With respect to the gross external reserves criterion, no country satisfied the criterion.”
He described this development as “a dismal performance, compared to the situation in the first half of 2011. In percentage terms, the performance score of the WAMZ countries on the convergence scale during the first half of 2012 was 62.5 per cent, compared to 79.2 per cent during the corresponding period in 2011.”
ECOWAS Commission, he said, “is committed to the establishment of a credible and sustainable monetary union in the sub-region with the ultimate goal of improving the standard of living of the entire ECOWAS citizenry.”
In this regard, the ECOWAS Convergence Council (Ministers of Finance and Governors of Central Banks) , “gave the ECOWAS Commission the overall responsibility of coordinating the activities in the Roadmap on the implementation of the ECOWAS Single Currency Programme, in collaboration with all the regional institutions involved in the implementation of the monetary cooperation programme.”
ECOWAS Commission is working to effectively implement the Roadmap activities, he said, and listed the activities to include, harmonisation and adoption of convergence criteria, harmonisation of statistics, and harmonisation of domestic tax policies as well as harmonisation of public procurement, public debt, accounting and statistical frameworks of public finance.”
Other activities include removal of all tariff and non-tariff barriers to free movement of goods, persons and services within ECOWAS, and financial market integration (money and capital markets and non-bank financial institutions insurance, Pension/Social Security Funds and industries).
Earlier, the Deputy Governor, Economic Policy of the Central Bank of Nigeria (CBN), Mrs Sarah Alade, cautioned WAMZ member countries to “avoid taking hasty decisions that will lead to the failure of the planned monetary union.”
She said it was important for ECOWAS, the West African Monetary Authority (WAMA) and the West African Monetary Institute (WAMI) to “escalate their collaborative efforts in order to identify areas of improvement in addressing sound monetary, fiscal and exchange rate policies which will promote macro economic stability.”
