Thursday, February 19, 2009

Many Regional Blocs Delaying African Unity-ADB

11 February 2009

Mr Alieu Jeng, Resident Representative of the African Development Bank (ADB) on Wednesday said the regional economic blocs on the African continent were a major problem hindering regional integration.

Africa has many regional blocs including the Economic Community of West African States (ECOWAS), the Southern African Development Community (SADC), Central African Economic and Monetary Community (CEMAC), the Common Market for Eastern and Southern Africa (COMESA), among many others that make it difficult to achieve regional integration.

Mr Jeng said, in his view, all the blocs should be reduced to about five since some of the member states of the African Union (AU) even had overlapping membership in those blocs. ‘To me tariffs are not the main problems delaying the achievement of the African Unity. It is the non-tariff barriers that have been created by people that hinder the dream of having a United Africa,’ he said. Mr Jeng was speaking at the launch of a report done jointly by the
Economic Commission for Africa and the AU titled: ‘Assessing Regional Integration in Africa III (ARIA III).’

The report aims, among other things, to assess regional integration processes on a regular basis to draw lessons for improving the integration programme. Dr Joseph Atta-Mensah, Chief, Regional Integration Officer at the United Nations Economic Commission for Africa (UNECA), reviewing the report said financial integration in terms of harmonising money or capital market on the African Continent would help ease payment and facilitate trade among countries in Africa. ‘Intra trade among Africans is very low. It is about five percent,’ he said, and pointed out that there was the need to increase trading among African countries.

Dr Atta-Mensah said the report, which particularly focused on financial integration was looking at possibilities of even integrating stock markets on the continent. ‘For instance, Ghana has a stock market, Nigeria has a stock market, Cote d’Ivoire has a stock market, how can we tie in Ghana’s stock market to let say Cote d’Ivoire’s stock market? Can a Ghanaian buy shares on the Nigerian stock exchange?’

He noted that already there were some monetary unions in place among some regional blocs that used a single currency and stressed the need for the whole African continent to have a single currency since that could also help achieve the needed development. ‘Monetary union with a single currency in Africa would therefore reinforce the single market,’ he said and added that a one market system needed one currency.

Dr. Atta-Mensah announced that the AU member states agreed they would establish an African Central Bank to be situated in Nigeria, an African Monetary Fund in Cameroon and an African Investment Bank in Libya, but said it was urgent that as a continent ‘we do something about the multiplicity of currencies’. He also said the UNECA was planning a programme dubbed: ‘mainstreaming regional integration in Africa’, where his organisation intended to meet with sections of civil society to explain such monetary policies on the continent.

Dr Temitope Oshikoya, Director General of the West Africa Monetary Institute (WAMI), said financial integration would help the African continent to withstand globalisation since no one country could do it alone. Making reference to the global financial crisis, he said, shocks emanating from the global scene could be minimized if Africans had a common market. ‘Monetary integration is a long term project’, he said, and urged Africans to support the programme because African integration was a strategy for African Development.

Dr Mahamadu Bawumia, Former Deputy Governor of the Bank of Ghana, who chaired the programme, advised African governments to take the issue of economic integration very seriously.