Letters of credit (L/Cs) can be opened in national currencies in countries participating in the emerging West African Monetary Zone (WAMZ).

The director general of the West African Monetary Institute (WAMI), Joseph Okwu Nnanna, confirmed this at a recent meeting in the Ghanaian capital, Accra.

L/C implications

Nnanna said at the meeting that despite the slow progress made by some countries towards currency convergence, WAMZ was still committed to introducing the new currency called the eco in 2009.

He also announced that the WAMZ Convergence Council had approved the formal use of national currencies for cross-border transactions within the zone.

"This means that the currencies are freely convertible within the WAMZ and can be used to finance goods and services in the zone. It therefore implies that L/Cs can be opened in national currencies for inter-regional trade imports and exports," he said.

WAMZ background

Nigeria, Ghana, Sierra Leone, Gambia and Guinea aremembers of WAMZ, which was formed in 2000 to try and establish a stable currency amongst mainly Anglophone countries in West Africa to rival the CFA franc, which is used by most of the region's Francophone countries.

The CFA franc is pegged to the euro and is guaranteed by the French Treasury. The eventual goal is for the CFA franc and the Eco to merge.

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