West African Clearing House (WACH)
History of West African Clearing House (WACH)
West African Clearing House (WACH) is an association of central banks in some West African states which came up on March 14, 1975 through an agreement signed in Lagos, Nigeria.
The member countries are; Benin, The Gambia, Ghana, Cote d’Ivoire, Liberia, Mali, Niger, Nigeria, Sierra Leone, Togo, and Burkina Faso.
In 1996, WACH was transformed to West African Monetary Agency (WAMA) with the headquarters in Freetown.
Objectives of WACH
1. To promote the use of currencies of member countries for intra-regional trade and other transactions.
2. To bring about economics in the use of foreign reserves of the member countries.
3. To encourage the members in trade liberalization among themselves.
4. To promote monetary co-operation and consultation.
The Problems of West African Clearing House (WACH)
The agency is faced with some problems such as;
1. Lack of Experienced Personnel: Settlement of payments witnessed long delays due to the inexperience of commercial bank staff with the operation of the clearing system.
2. Poor communication: Ineffective communication has contributed to delays in payments. Sometimes payments will not be effected until after six months; As a result, there is a lack of confidence in the system by businessmen.
3. Exchange rate fluctuation: There is a rapid change in the rate of exchange. In addition to this, the staff of central Banks experienced frequent delays in receipt of applicable exchange rates of their currencies as regards its conversion to the West Africa Unit of Account (WAUA).
Achievement of WACH Now The West African Monetary Agency (WAMA)
1. It operates a credit guarantee fund scheme for ECOWAS member Central banks.
2. It manages a clearing and payments system among central banks in West Africa.
3. It has contributed to the improvement of monetary cooperation among ECOWAS member Central Banks.
4. It has contributed to the improvement of settlement of transactions within the sub-region through the introduction of the West African Unit of Account (WAUA).