IMF de­bate fu­ture of mon­e­tary in­te­gra­tion in Sub-Sa­ha­ran Africa

The Pak Banker - - COMPANIES/BOSS -

The Africa Train­ing In­sti­tute (ATI), the IMF, and the Banque de France jointly or­ga­nized a high­level sem­i­nar at the ATI in Mau­ri­tius. Over 30 high-level pol­i­cy­mak­ers from across sub-Sa­ha­ran Africa and academics from Africa, Amer­ica, and Europe gath­ered to dis­cuss the fu­ture of cur­rency ar­eas, with a fo­cus on con­di­tions un­der which they re­main an ap­pro­pri­ate mech­a­nism for im­prov­ing wel­fare in their mem­ber coun­tries.

In their open­ing re­marks, IMF Deputy Man­ag­ing Di­rec­tor Carla Grasso and In­sti­tute for Ca­pac­ity De­vel­op­ment Di­rec­tor Sharmini Coorey un­der­lined the time­li­ness of this sem­i­nar. Mon­e­tary in­te­gra­tion is ar­guably one of the most press­ing macroe­co­nomic pol­icy ques­tions of our times, with ur­gent ques­tions re­gard­ing gov­er­nance and de­sign of the Euro area on the one hand, and en­thu­si­asm for fur­ther mon­e­tary in­te­gra­tion in Africa on the other.

Par­tic­i­pants' views con­verged on the pre­req­ui­sites for mon­e­tary in­te­gra­tion such as more trade and eco­nomic in­te­gra­tion. The ex­po­sure of po­ten­tial mon­e­tary union mem­bers to large asym- met­ric shocks and the risks as­so­ci­ated with large cur­rent ac­count im­bal­ances were rec­og­nized as sources of con­cern. Some par­tic­i­pants noted that while mon­e­tary unions-such as the CFA zone­have con­trib­uted to price sta­bil­ity, there are more gains to be achieved on growth and eco­nomic de­vel­op­ment from trade in­te­gra­tion, than per­haps from mon­e­tary in­te­gra­tion. They dis­cussed whether Africa should fo­cus more on those in­te­gra­tion ob­jec­tives. A panel that fo­cused on the need to de­velop ca­pac­ity be­fore start­ing re­gional in­te­gra­tion agreed on the need for bet­ter in­fra­struc­ture de­vel­op­ment in all sec­tors-both phys­i­cal and IT-as well as for strength­ened hu­man re­sources as pre­req­ui­sites for reap­ing the ben­e­fits of any form of re­gional in­te­gra­tion.

In the se­cond ATI Pres­i­den­tial Lecture, Dr. Car­los Lopes, Ex­ec­u­tive Sec­re­tary, UN Eco­nomic Com­mis­sion for Africa, made a strong ap­peal to African lead­ers to de­liver on their agreed upon strat­egy of in­dus­tri­al­iza­tion in Africa as a pre­req­ui­site for a suc­cess­ful re­gional in­te­gra­tion. He noted the pri­or­i­ties of in­vest­ing in in­fra­struc­ture and the de­vel­op­ment of both hu­man re­sources and in­sti­tu­tions.

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