Central bank chiefs meet

The current Chairperson, Dr Paul Acquah, the governor of the Central Bank of Ghana, stressed that Africa was still distant from the ultimate goal of monetary co-operation.

“It is easier to embrace ideas with great promise than put them into concrete actions,” he said at the opening, adding that: “We should by now have built solid pillars for monetary co-operation at least at the regional levels to support economic integration in Africa.

“Progress has been slow for diverse reasons rooted in the difficulties that have been part of Africa’s development experience. The unfinished business of the Association, therefore, remains formidable. Current trends in trade relations and regional co-operation in the world have created a greater urgency now to implement the required programme to advance our noble cause of monetary co-operation”.

Acquah said that the AACB was meeting at a time when growth in most economies in the region had been robust and macroeconomic conditions, inflation, fiscal deficit, external payments positions, and external debt indicators were improving.

He stated that Africa’s overall prospects were much brighter and its economies were building increasing resilience.

In his address the chairperson also stated that the policy challenge going foward, was to accelerate and sustain growth in order to meet the MDGs, which was the main policy priority of most of the member countries.

The convergence of African economies would be fastened by consolidation of the wide range of reforms that have been characteristic of the region in recent years, he added, going on to say that accelerated growth required scaling up of critical investments in key areas.

“While we look to external sources for these investments and the use of fiscal space created as a result of the multilateral Debt Relief Initiative for some of our countries to promote growth and poverty reduction, we ought to mobilise substantial resources domestically as well”, he said.

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In his opinion it was ,therefore, very appropriate that the symposium for this year devoted its time to the theme “Domestic Capital Markets and Mobilization of Resources for Growth and Poverty Reduction”.

It was stressed that the monetary integration of Africa demanded a great degree of commitment among the people of the continent and that it was an agenda that the AACB had adopted. Failure to do this, said Acquah, would mean that the ‘agenda’ would only serve as an opportunity for the Associaition to congregate on an annual basis just for the sake of solidarity: “The pursuit of monetary integration, which required implementation of the fundamental policy and structural reforms that we have identified, is a desirable objective in itself. It serves to enhance economic management at individual country levels and policy accountability in the context of the cooperation arrangements”.

He said that the building of harmonised economic and statistical indicators to better monitor macro-economic convergence and developments in member countries and payments system improvement to support the integration of the financial sector for the region to make it competitive internationally, were two specific areas of practical cooperation identified to help put some of the building blocks together for a monetary zone.

He ended by stating that: “The cause of integration would be greatly served by a commitment to seek to reduce impediments to trade and financial flows, and major constraints, such as infrastructure deficiencies that limit the movement of goods regionally and across the African economic space. After all, rapid sustainable growth based on trade and commerce in a sound economic environment and good governance is the ultimate objective of the monetary co-operation programme”

The guest speaker, Prime Minister Nahas Angula of Namibia, said that the African continent as a whole remained a marginal player in world economic affairs especially in terms of trade and investment flows.

Angula noted that Africa’s share of merchandise exports fell from a high of 6.3 percent in 1980 to 2.5 percent in value terms in 2000.

Africa’s share of world manufactured exports remained unchanged at 0.8 percent during the last two decades, while that of Asia grew from 7.1 percent in 1980 to over 21.5 percent today.

In terms of Foreign Direct Investment inflows, Africa’s world share only grew from 1.8 percent in 2002 to 3 percent in 2004 while that of developing Asia grew from 12 percent to 21 percent during the same period.

There are a host of reasons that explain Africa’s inability to trade itself out of this situation, he said.

These include supply side constraints, infrastructure bottlenecks and above all a narrow industrial base and shortage of appropriate skills.

Africa therefore has to develop its capacity in order to become a competitive producer for the world market, and there is no doubt governments have the primary responsibility to address these issues.

“In Namibia, our government has already embarked on initiatives to address the issues of skills training, export diversification, export competitiveness and development of infrastructure as some of the priority intervention areas,” Angula said.

August 2006
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