DUMMY REPORT OF THE FIRST MEETING OF THE SUB …
UH
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Distr.
LIMITED
CS/CMI/JMCMFCBG/II/9
November 2013
Original: ENGLISH
COMMON MARKET FOR EASTERN
AND SOUTHERN AFRICA
Second Joint Meeting of the COMESA Ministers of
Finance and Central Bank Governors
29 - 30 November 2013
Lilongwe, Malawi
REPORT OF THE SECOND JOINT MEETING OF THE COMESA
MINISTERS OF FINANCE AND CENTRAL BANK GOVERNORS
2013 (IZ-/mmn)
INTRODUCTION
1. The Joint Meeting of the COMESA Ministers of Finance and Central Bank Governors was held from 29 - 30 November 2013, in Lilongwe, Malawi.
A. ATTENDANCE, OPENING OF THE WORKSHOP, ELECTION OF THE BUREAU, ADOPTION OF THE AGENDA AND ORGANISATION OF WORK
2. The meeting was attended by Ministers of Finance and Governors of Central Banks and their officials from Burundi, Congo (DR), Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Sudan, Seychelles Swaziland, Uganda, Zambia and Zimbabwe. Representative of the African Development Bank also attended the meeting. The list of participants is in Annex IX of this report.
Opening of the Meeting (Agenda item 1)
3. The Secretary General, COMESA, Mr Sindiso Ngwenya made his opening remarks in which he welcomed Honourable Ministers and Governors to the second joint meeting of Ministers of Finance and Governors of Central Bank Governors. He also thanked the Chief Guest, the Right Honourable Vice President of the Republic of Malawi, Mr Kumbo Kachali for having come to officially open the meeting.
4. Mr Ngwenya requested His Right Honourable Vice President to convey his gratitude to Her Excellency, Dr Joyce Banda, the President of the Republic of Malawi for her visionary leadership that had seen Malawi liquidating its external payment arrears and achieving macroeconomic stability in the economy.
5. He underscored the important role that Ministers of Finance and Central Bank Governors had played in achieving sustainable socio-economic development and regional integration as has been the case in other regions such as ASEAN.
6. The Secretary General then dwelt on the agenda of the meeting that included considering, among other things, the report of the Fiscal and Monetary Affairs Committee, COMESA’s Strategy on Inclusive Growth, the COMESA Infrastructure Fund and COMESA Electronic Commerce and Trade Facilitation programmes. In conclusion, he expressed confidence that the joint meeting would be able to dispense with the heavy work load on the agenda and make decisions that would further deepen social and economic integration in the COMESA region and thus contribute to continental integration.
7. The Second joint meeting of the Ministers of Finance and Central Bank Governors was officially opened by the Right Honourable Kumbo Kachali, Vice President of the Republic of Malawi. He welcomed all the delegates to Lilongwe.
8. The Vice President pointed out that the COMESA region’s strategy for regional integration encompassed both market integration and production integration approaches and this was being done through trade liberalisation and investment promotion. A new focus and momentum should now be shifted in the next decade and beyond to development through integration.
9. He stressed that one of the most important factors for enhanced intra-regional trade is monetary integration through financial and monetary co-operation. This is done by improving efficiency of financial services, development of regional bond or debt markets, lowering transaction costs, and increased transparency in prices of goods and services.
10. He expressed delight in that the African Development Bank and COMESA Secretariat had developed a Multilateral Fiscal Surveillance Framework which was endorsed by the COMESA Heads of State and Government in their meeting in Lilongwe, Malawi in 2011. In noting the progress that had been achieved in developing the templates and guidelines for the Framework, the Vice President underscored the crucial role that the framework would play in the integration agenda of the region as it had done in other regional organisations such as WAEMU.
11. The Vice President noted that the meeting would consider important issues that included a draft paper on inclusive growth in the COMESA region and a study on the possibility of launching an Infrastructure Bond in the COMESA region.
12. He then declared the Second Joint Meeting Ministers of Finance and Central Bank Governors officially open.
13. Dr. Maxwel Mkwezalamba, Minister of Finance of the Republic of Malawi , also made a statement. In his statement, he pointed out that one of the most important critical factors for enhanced intra-regional trade and the establishment of a dynamic common market is monetary integration through financial and monetary co-operation. He underscored that this requires close cooperation between Ministers of Finance and Central Bank Governors. He also emphasised the speedy implementation of the COMESA Multilateral Fiscal Surveillance Framework for ensuring fiscal discipline and enhancing regional convergence.
Election of the Bureau (Agenda item 2)
14. The Joint meeting elected the following Bureau members:
Co-Chairperson: Malawi
Co-Rapporteur: Burundi
Adoption of the Agenda and Organisation of Work (Agenda item 3)
15. The meeting adopted the following agenda:
1) Opening of the meeting
2) Election of the Bureau
3) Adoption of the Agenda and Organisation of Work;
4) Consideration of the reports of the Second Joint Meeting of Fiscal and Monetary Affairs Committee on the following:
i) Guidelines and Templates for the Implementation of the COMESA Multilateral Fiscal Surveillance Framework; and
ii) Knowledge Sharing Workshop on Preparations of Medium Term Macroeconomic Frameworks
5) Proposal for the Design of Partial Credit Guarantee Scheme for the COMESA Region;
6) COMESA’s Strategy for Achieving Inclusive Growth;
7) Brief on COMESA Fund ;
8) and on Implementation of the COMESA Infrastructure Fund;
9) Proposal for Creation of the COMESA Infrastructure Bond;
10) Africa 50 Infrastructure Fund;
11) COMESA Programme on Domestication and Management of Legal Instruments;
12) Presentation of the COMESA Electronic Commerce and Trade Facilitation Programme;
13) Any Other Business; and
14) Adoption of the Report and Closure of the Meeting.
B. ACCOUNT OF PROCEEDINGS
Guidelines and Templates for the Implementation of the COMESA Multilateral Fiscal Surveillance Framework (MFSF)) ( Agenda item 4(i))
16. The Chairperson of the Joint Committee made a presentation under this agenda item. In her presentation, she provided a brief overview of the COMESA/AfDB-sponsored report on Multilateral Fiscal Surveillance Framework (MFSF). She informed the Workshop that the principal recommendations of the report were endorsed by the July 2011 Joint Meeting of the Ministers of Finance and Governors of Central Banks, and that the Heads of State and Government of COMESA Member States had also endorsed the operationalization of the Framework. She reported that based on those decisions, templates and guidelines were prepared with the assistance of the African Development Bank to operationalise the Framework. She informed the meeting the Second Joint Meeting of Fiscal and Monetary Affairs Committee reviewed the templates and guidelines and made recommendations. She informed the Joint meeting that they will be operational after endorsement by the current Joint Committee of Ministers of Finance and Central Bank Governors.
17. She highlighted the following under each guideline/template
Towards a Robust Public Finance Management System (PFM)
18. She pointed out that the MFSF report had emphasized the importance of having a robust Public Finance System in Member States for improving fiscal performance and achieving fiscal convergence among them, as well as facilitating and operating an effective multilateral fiscal surveillance mechanism. By current international practices, the robustness of a country’s PFM system is assessed on the basis of scoring on 31 individual fiscal performance indicators developed in the PEFA system as contained in Annex I. On the basis of published PEFA assessment reports for 11 COMESA member countries, the overall score for these countries is graded as B on a 7-scale ranging from a low of D to a high of A, with a fairly wide divergence in scores as between countries and, in case of each country, as between the 31 indicators. He reported that countries reform their systems on the basis of prioritizing and sequencing (based on templates contained in Annex II) measures to improve scores on individual PEFA indicators over a reasonable timeframe, not too short to be impractical but also not too long to lose momentum. Simultaneously, countries should also strengthen various legal frameworks and regulations, actors involved in implementing reforms, and the related institutions and instruments to provide suitable ‘enabling environment’ as contained in Annex III for the implementation and sustainability of the reform measures. The objective should be to achieve an overall score of at least ‘B’ for each country- a score considered minimum necessary to enforce fiscal discipline and achieve outcomes consistent with the objectives of fiscal convergence and effective fiscal surveillance.
19. In the ensuing discussions, the Joint meeting acknowledged the need to strengthen country PFM based on PEFA indicators and including the components comprising the ‘enabling environment.
Decisions
20. The Joint Meeting decided the following:
i) All member countries undertake review of their PFM Systems based on PEFA assessment and formulate PFM reform programmes . Member countries which did not have a previous PEFA assessment should undertake that exercise with outside assistance . If this is not possible they may make a self assessment on PEFA model that will form the basis for their PFM reforms;
ii) The proposed two templates one on enumerating, prioritizing and sequencing reforms of PEFA indicators, and other enumerating components of enabling environment (see annexes 2 and 3) to be addressed can be used by member countries to formulate and monitor their respective PFM reform programmes and action plans; and Formulate and begin implementation of PFM reform programme to reach at least an average score level of “B”
Fiscal Responsibility Law (FRL)
21. The following are salient features of Fiscal Responsibility Law
• Fiscal Responsibility law (FRL) is a limited scope law that elaborates on the rules and procedures relating to three budget principles: accountability, transparency and stability. Within this definition there are four components that make up the law namely; medium term fiscal aggregates, medium term and annual budget strategy; regular publication of related reports; audited annual financial statements that ensure the integrity of fiscal information; and fiscal enforceability.
• In the case of COMESA Fiscal Responsibility Law should meet five objectives, namely; underpin the implementation of the strengthened PFM; promote fiscal stability; achieve COMESA’s, regional fiscal convergence criteria; enhance transparency; enhance accountability; and ensure enforceability.
• FRL may be useful in encouraging countries to strive towards fiscal stability by inclusion into the law a country’s fiscal rule as a necessary and practical step towards meeting the regional convergence criteria.
22. The proposed template for Enacting FRL is contained in Annex (IV)
Discussions
23. In the discussions that followed, the Joint Meeting noted the following observations of the experts:
i) The agreement by experts on the need for FRL in the context of the proposed strengthening of PFM systems.
ii) Some participants mentioned that their PFM Act included some elements of FRL and enquired therefore, whether there is any need for a new FRL.
iii) They agreed that FRL generally would address a wide number of aspects of fiscal responsibility than what would presumably be included in a PFM Act, and hence the need for a more comprehensive FRL. It will also not harm if the rules included in the PFM Act were also replicated in the FRL.
Decisions
24. The Joint Meeting made the following decisions.
i) Member countries which do not have Fiscal Responsibility Laws should enact them;
ii) If member countries already have FRL or related Acts they need to review them in order to make them consistent with the proposed COMESA FRL Guidelines; and
iii) Member countries formulate revolving Medium Fiscal Framework (MTFF); Medium Term Budget Framework (MTBF); Medium term Expenditure Frame work MTEF) and Medium Term Country Convergence Programme (MTCCP).
Terms of Reference for the Convergence Council
25. The Joint meeting noted that the major objectives of the Terms of Reference are the following:
i) Ensure that Member Countries’ convergence programme is consistent with the regional convergence criteria and objectives, and that intended policies would achieve the intended financial targets within a reasonable time period;
ii) Ensuring compliance by member states with their convergence programme.
iii) Assisting member states, through consultation and capacity building measures, in establishing appropriate surveillance mechanism at the national levels;
iv) Ensuring that fiscal convergence is complemented by trade integration (specially via promoting intra-regional competitiveness); and
v) Establishing a system of sanctions and inducements to help promote convergence and redress slippages in the implementation of convergence programs;
26. The Proposed TOR is contained in Annex V)
Discussions
27. The Joint meeting observed that the following comments of experts meeting:
• Some elements of the TOR are the procedures that should be followed under the implementation of Excessive Slippage procedures (ESP) and should be reflected in ESP guidelines and not in the TOR.
• To ensure ownership by member States there is no need to invite outside bodies such as IMF and the World Bank, to participate in the deliberations related with member country’s excessive slippage in the achievement of fiscal targets.
• The Terms of Reference need further scrutiny by a small group of experts before it is fully endorsed.
Decision
28. The meeting assigned a team of experts from Uganda, Kenya, Malawi and Zambia to carefully review the Terms of Reference for the Convergence Council and come up with revised term . The proposal of the Sub-Committee should be submitted to the next meeting of the Joint Committee of Ministers of Finance and Central Bank Governors,. in 2014.
Excessive Slippages Procedure (ESP)- Implementation Guidelines :
29. The following are the salient points of the Guidelines on Excessive Slippage Procedure:
• In addition to budget deficit, convergence criteria should include a quantitative debt ratio expressed either as a 50% of GDP, or 250 percent of government revenue (excluding grants), with the other as a warning “benchmark ratio;
• Embed trade integration surveillance with fiscal surveillance by including as a “bench mark” a member State’s improvement in its ranking in World Bank’s Doing Business Index to cluster within 5 numbers of the average of the three best Member State;
• Each Member State should be required to formulate and implement a Medium Term Country Convergence Programme(MTCCP) indicating its objectives, targets, and intended policies aimed at reaching at its own prioritizing and sequencing, but in a reasonable time period;
• The MTCCP should be submitted to the Convergence Council for its approval and assessment that it is consistent with the aims and objectives of the regional integration programme and subsequently to the country’s national assembly to give it a legal status; and
• Slippage is defined as the excess in the actual realization of budget deficit, or debt ratio over the MTCCP target
Discussion
30. The Joint meeting noted the following observations of the experts meeting:
• External debt (excluding grants) to GDP ratio of 50% and government revenue excluding grants to GDP ratio of 250% are not part of the agreed upon macroeconomic convergence criteria for the COMESA region. Their inclusion in ESP was not clear for some delegates;
• . Some also pointed out that the bench mark of external debt to GDP ratio of 50% is low for most COMESA member countries and could be difficult to achieve.
• The Excessive Slippage Procedure needs further scrutiny by a small group of experts before it is fully endorsed.
Decision
31. The Joint meeting decided that the team of experts should also carefully review the Guideline for Excessive Slippage Procedures and come up with improved Guidelines which is consistent with the agreed upon macroeconomic convergence criteria and the objective conditions of the region. The team of experts should submit its recommendation to the next meeting of the Joint Committee in 2014.
COMESA SWAP Facility (COSWAP)
32. The Joint Meeting noted the following salient features of the Facility:
• The facility addresses the short term balance of payment difficulties that member states may incur, thereby fulfilling the “crisis management aspect of the surveillance framework;
• The facility will have its own resources, subscribed by member countries and supplemented by possible further contribution from development partners;
• The drawing rights of Member States will be related to their subscription to the Facility;
• Member countries contribution to the facility should be an amount equal to the lesser of the amount of foreign exchange reserves a Member State holds over and above a thresh hold equivalent of two and half months’ imports, or an amount equal to 10% of that excess;
• Countries that have less than the threshold amount will only make a token payment of say US$1 million to the facility, but would be expected to make the required contribution once their reserves exceed the threshold, calculated in reference to the imports of the base year when the Facility becomes operational
• Member countries maximum drawing eligibility be a multiple of five of its subscriptions, subject to a minimum of SDR 20 million and a maximum of SDR 100 million;
• The managing Committee will have five members who are also the members of the Convergence Council; and
• In its initial stages, the Facility will operate as a swap facility whereby the borrower Member State would swap its currency for equivalent convertible currency from the lending country; This arrangement would last until a monetary union is established and a single currency is in circulation when the contribution amounts will be deposited in a common pool with the COMESA Central Bank.
33. The following are the eligibility criteria for the use of the Facility’s funds:
• Member state has made its calculated contribution to the facility;
• The Member State has incurred , or is facing an immediate balance of payments crisis due either to external circumstances or policy slippages from its Convergence Programme;
• The Member State has a ‘use of fund resources’ arrangement with IMF, or has requested the Fund for such assistance and the IMF has expressed its readiness to negotiate a suitable arrangement with the Member State; and
• The amount of assistance from the Facility will be decided by the Managing Committee of COSWAP, subject to the maximum rights allotted to the Member State
Discussions
34. The meeting noted that during the validation workshop Egyptian delegate commented that the proposal of the establishment of COSWAP was ill advised and unnecessary, since there are enough international agencies to meet balance of payment needs of COMESA region and that member countries would not wish to part with their valuable external resources and contribute towards the COSWAP Facility. He therefore expressed his reservation to the proposal. The same reservations were also expressed by some Ministers and Governors during the Joint Meeting. However, some Ministers and Governors welcomed the proposal, in view of its usefulness to enhance the spirit of regional cooperation and for increasing the weight of regional voice in financial assistance arrangements. .
Decision
35. The Joint meeting decided that the proposed COSWAP Facility should be further fleshed out especially for certain important details such as interest rates on drawing from the COSWAP, voting system in the Convergence Council etc,. To that effect the Team of Experts should carefully study those issues and make appropriate recommendations to the next meeting.
Fiscal Surveillance and Trade Integration
36. The salient points of the presentation under this agenda item were:
• Member countries incentive for implementing fiscal convergence criteria is directly related to the degree of trade integration within the region. Hence it is necessary, therefore, to embed the trade agenda in the fiscal surveillance framework with a view to operationalise it with the same urgency as the fiscal convergence agenda;
• As part of the EU financed RISM initiative, COMESA has developed a list of indicators and a medium term performance Assessment Framework (PAF) that can assess member countries efforts at implementing their integration agenda within the overall COMESA framework of objectives and instruments.
• The framework contains a holistic view of integration and proposes a menu of 19 main indicators and 6 bench marks that include three indicators, relating to fiscal deficit, productivity and competitiveness.
Discussions
37. The Joint Meeting noted that the experts meeting welcomed the proposal. The experts were also convinced that apart from helping the fiscal convergence process, this embedment would also contribute for enhancing COMESA regional integration agenda.
Decision
38. The meeting decided that COMESA should adopt the trade surveillance framework, assess member States’ overall performance within that framework and forward to COMESA Policy Organs for their consideration.
Action Plan for the Implementation of the COMESA Multilateral Fiscal Surveillance Framework
39. The meeting considered the Action Plan for the Implementation of the COMESA Multilateral Fiscal Surveillance Framework.
Decisions
40. The meeting approved the:
i) Conversion of the joint meeting of Ministers of Finance and Central Bank Governors to the Convergence Council;
ii) Inclusion of Ministers of Trade/Industry in the Convergence Council; and
iii) Short, medium and long term action plans as contained in Annex VI of this report
Report of the Workshop on Medium Term Macroeconomic Frameworks (Agenda Item 4(ii)
41. The Chairperson of the Joint Meeting of Experts on Fiscal and Monetary Affairs informed the meeting that the knowledge sharing Workshop on preparation of medium term macroeconomic frameworks was held from 4-8 November 2013, based on the instruction to CMI by the 18th Meeting of the COMESA Committee of Governors of Central Banks which was held in Kigali, Rwanda in December 2012.
42. The workshop served to achieve among others the following main objectives:
iv) To improve the understanding of the participants, about the processes and institutions required for successful implementation of the frameworks; and
v) To help COMESA member countries to harmonise their budgeting and financial planning on a multi annual basis, which is likely to be required for higher degree of regional monetary integration
43. The Joint Meeting was further informed that the workshop included presentations by experts on their country experiences and group work on practical exercises. Resource person from the IMF Resident Representative Office in Kenya made a presentation on “Building Blocks of Budget Expenditure and Fiscal Frameworks”. Resource persons from National Treasury of Kenya, and Ministries of Finance in Uganda and Zambia made presentations on their experiences in the preparations of Medium term Budget, Fiscal and Expenditure Frame works in their respective countries focusing on the following:
i) Key characteristic features of the frameworks;
ii) Key conditions to operationalise them;
iii) Roles and responsibilities of different institutions;
iv) Links of MTBF, MTEF and MTFF;
v) Challenges faced in implementing the frameworks and
vi) The way forward for improving the implementation of the Frameworks.
44. After the presentations, group work on practical exercises related with the Frameworks were carried out by participants and formal group notes were prepared and presentations for the plenary were made.
45. The workshop identified the gaps/challenges in the preparation of Medium Term Budget , Expenditure and Fiscal Frameworks in the COMESA Member countries and also proposed solutions to fill the gaps.
46. The Joint meeting was also informed that the Meeting of Experts on Fiscal and Monetary Affairs which was held in Nairobi, Kenya on 9th November 2013 reviewed the report of the workshop and approved the recommendations. The recommendations are submitted for endorsement to the Joint Committee of the Ministers of Finance and Central Bank Governors.
Discussions
47. In the discussions that followed the Joint Meeting emphasised the following:
i) The importance of the implementation of the Treasury single account; and
ii) The need by member countries to find lasting solution to the perennial low absorption of funds from development partners, through learning from best practices and by sharing experiences.
Decisions
48. Based on the presentations, discussions, highlights of the gaps in MTBF, MTFF, and MTEF and the proposed solutions, the meeting decided the following:
i) There is need to ensure strong coordination of the implementation of the Medium Term Fiscal Frameworks, Medium Term Budget Frameworks and Medium Term Expenditure frameworks by the COMESA member states.
ii) Harmonise and strengthen the legal and institutional framework for implementation of medium term macroeconomic frameworks by the member countries.
iii) Carry out a benchmark study to establish the status of implementation of medium term frameworks in the various member countries with the purpose of establishing areas of improvement and harmonization.
iv) COMESA member states should carry out capacity assessment programmes to establish the existing capacity gaps and areas of technical assistance as well as developing and implementing a well-coordinated capacity building programme in the areas medium term macroeconomic frameworks;
v) COMESA countries should develop and encourage the use of robust Macroeconomic models that would help improve forecasting of the macro aggregates, priority medium term sector allocations in line with the unique structures of the economies of the member states;
vi) COMESA members states should seek to find a lasting solution to the perennial low absorption of funds from development partners. COMESA Secretariat should assist in this regard by identifying best practices.
vii) The need by member countries to improve on expenditure efficiency through improved governance, better prioritization and culture change.
viii) The member states that have not implemented the treasury single account to do so to enhance better cash management, and efficient Government banking arrangement.
Proposal for the Design of Partial Credit Guarantee Scheme for the COMESA Region ( agenda item 5)
49. The Joint meeting was informed that the 19th Meeting of the COMESA Committee of Governors of Central Banks discussed the proposal for establishing Partial Credit Guarantee Scheme in COMESA. They agreed that PCGSs can play a significant role in expanding the availability of finance for SMES. They also noted that the effectiveness and impact of schemes run by central banks or central government are not satisfactory because of moral hazard risks of excess risk taking by financial institutions. They also agreed that the operationalisation of partial credit guarantee schemes by central banks contradict with their monetary policy objectives. They further observed that PCGSs are more successful and sustainable when they are operated by the private sector and in some cases in partnership with Government.
50. The meeting noted that Governors had decided to submit the proposal to the Joint Meeting of Ministers of Finance and Central Bank Governors, since the creation of enabling environment for the establishment of appropriate PCGSs requires the involvement of both institutions.
Decisions
51. The Meeting decided the following:
a) In order to ensure sustainability of PCGSs, the COMESA member countries should learn from the experiences of successful PCGSs and should try as much as possible to adopt international best practices in the operation and management of PCGSs. These should include experiences of Corporate and mutual Guarantee Schemes which are proved to be more successful, and are operated by private sector or in some cases by private sector in partnership with the government; and
b) The central banks should not operate PCGSs. However, they should create an enabling environment in collaboration with Ministry of Finance within their mandates for their creation.
COMESA’s Strategy for Achieving Inclusive Growth (Agenda item6)
52. Under this agenda item, the Secretariat presented the Report of the Workshop on Regional Integration and Inclusive Growth held on 16-17 May 2013 in Lusaka as well as the Draft Policy Paper on Inclusive Growth in the COMESA Region, attached to this report as Annex VII. The meeting welcomed the presentation and made the following observations:
a) Given the high poverty and youth unemployment levels in the region, the program is a priority and should be a standing agenda item for subsequent meetings;
b) There is need for an action plan on inclusive growth with timeframes because issues of poverty alleviation and youth employment are crucially important;
c) Bringing about growth in the rural areas where poverty is concentrated is a big challenge for Member States but it is feasible with appropriate interventions. In the case of Malawi, for instance, such simple programmes as distributing chicks to villagers and the “one cow per family” programs have gone a long in improving the lives of people in the rural areas; and
d) A number of COMESA programs already provide seek to achieve inclusive growth, but these need to be consistently implemented. These programmes include the FTA to deliver economies of scale; gender and FEMCOM to promote gender equality and economic empowerment; public health to promote access to health services; rural development through ACTESA and CAADP; Innovation Funds to assist innovation; cluster programs in the textiles, footwear, and agro-products sectors; SME development; infrastructure development covering energy, transport and ICT; liberalization of communication and financial services; peace and security; and macroeconomic convergence.
53. In terms of the way forward and timelines, the meeting was informed that following the workshop held in May 2013, the COMESA Secretariat has collaborated with the UNECA and a workshop will be held on 5-6 December 2013 in Gaborone to bring together stakeholders and experts to finalise the draft policy on inclusive growth and an implementation strategy. The report of the workshop will be considered by the COMESA Policy Organs meeting to be held in February 2014 in Congo DR. Thereafter, the policy and strategy will be implemented by Member States on the basis of the Council Decision.
Decisions
54. The meeting decided as follows:
a) The issue of Inclusive Growth should be a standing agenda item on the meetings of Ministers of Finance and Governors of Central Banks;
b) CMI and the Secretariat should prepare a comprehensive program on inclusive growth for consideration at the next meeting of the Ministers and Governors, and in this regard should study available good practices covering inclusive approaches to savings, credit, insurance, payments and remittances;
c) There is need for sharing experiences and best practices among Member States on interventions for community development initiatives covering areas such as community banking, community innovation, technical education, and entrepreneurship training; and
d) Implementation of the regional integration programmes that advance inclusive growth should be appropriately prioritized and in this regard should be mainstreamed into the national planning and budgeting processes.
Progress on COMESA Fund (Agenda 7)
55. The Ministers and Governors were presented with a status update on decisions made by the 9th COMESA Fund Ministerial Committee Meeting held in September 2013. The Ministers were informed that Progress Monitoring Reports (PMR’s) and Regional Integration Implementation Programmes (RIIP’s) were all finalised and submitted by the agreed deadline of 31st October 2013. Further, Member States also fulfilled the requirements on provision of sources of verification. The Ministers noted that a formal request had been made to Brussels requesting a no-cost time extension of the RISM programme from 2014 to 2016 in order to accommodate implementation for project support countries.
56. The Meeting also noted that a formal request had been made by Secretariat to the EU delegation in Zambia for the disbursement against the 2013 approved RISM resources. The Member States whose RIIP’s and PMR’s were approved in 2013 are Comoros, Burundi, Djibouti, D.R Congo, Kenya, Malawi, Mauritius, Rwanda, Seychelles, Swaziland, Uganda, Zambia and Zimbabwe.
57. The Meeting were informed that the RISM indicators had been revised in line with the approved process for reformulation and were based on the COMESA Medium Term Strategic Plan and Council Decisions. The meeting noted that as the proposed next steps, Secretariat would incorporate the indicators into the Performance Assessment Framework (PAF), with the inclusion of technical descriptions of the actions required of Member States, regional baseline situations, and sources of verification. This would ensure finalization and signing of the RISM Consolidation Contribution Agreement with the European Union (EU).
58. The Ministers noted that the RISM Consolidation Contribution Agreement had to be signed by the end of 2013 failure to which the funds would be reverted to the EU.
Discussions
59. The Ministers and Bank Governors noted the presentation and determined that it will be important to strengthen the linkages between the Regional Integration Implementation Programmes under RISM and the National Indicative Programmes (NIPs) in order to achieve complementarities of funding.
60. The Meeting was informed about the 11th EDF meetings between the EU, National Authorizing Officers and Regional Authorizing Officers scheduled for the first week of December 2013. They agreed on the need to acknowledge the significant contributions by the EU to the COMESA Adjustment Facility. It was further agreed that additional funding to the Facility under the framework of the 11th European Development Fund (EDF) should be requested.
61. The Meeting also agreed to use the 11th EDF meeting to emphasize the importance of extending the current RISM programme beyond the 2014 implementation period in order to provide a more realistic timeframe for the implementation of RISM projects.
Decision
62. The meeting made the following decisions:
i) The list of indicators as presented in Annex VIII were endorsed.
ii) Secretariat finalizes the Performance Assessment Framework based on the endorsed indicators in order to ensure that the RISM Consolidation Contribution Agreement is signed by end of December 2013
Progress on COMESA Infrastructure Fund (CIF)
63. The Ministers were presented with a status update on progress made under the CIF in line with the decision of the 9th COMESA Fund Ministerial Committee meeting. The Ministers were informed that the PTA Bank was currently awaiting submission of curriculum vitae from the relevant Member States for members of the CIF Interim Advisory Board. It is expected that the Board might be appointed during the next PTA Bank Board of Directors meetings in early December 2013.
64. The Ministers noted that the Memorandum of Understanding (MoU) relating to the transfer of management of the CIF to PTA Bank (the “CIF Transfer Agreement”) was awaiting ratification by the CIF Interim Advisory Board, once appointed and convened. It was also noted that the transfer from COMESA Secretariat to the PTA Bank of the USD 5,780,000 contributed by Member States to the Base Fund was still outstanding and would only happen upon execution of the CIF Transfer Agreement between the PTA Bank and CIF.
65. The Ministers noted that the Secretary General of COMESA had now approved the $295,884 budget for the roadshows and the transfer to PTA Bank is now awaited. In the interim, the PTA Bank continues to engage potential investors and has already undertaken preliminary roadshows to Mauritius, United Kingdom and Kuwait, as well as engaging local regional investors through one on one meetings and other forums.
Proposal for Creation of the COMESA Infrastructure Bond (Agenda item 8)
66. The Joint Meeting was informed that, as a follow up on the 8th COMESA Fund Ministerial Committee meeting of 19th April 2013, in Washington DC, the COMESA Secretariat engaged Consultants to undertake a study on the possibility of launching a COMESA Infrastructure Bond.
67. The Meeting noted the presentation.
68. The salient points of the findings of the Study are summarized as follows:
i) It was found out that Africa`s infrastructure needs are in excess of US$93 billion per annum. (This is according to African Development Bank and the World Bank).
ii) There is a large pipeline of infrastructure projects in COMESA Member States, in need of financing. According to a study conducted by PWC, there is a pipeline of 13 infrastructure projects in COMESA Member countries, ready for to be taken to the market for financing purposes.
iii) Empirical evidence has shown that most infrastructure projects are financed through PPPs and/or infrastructure bonds, primarily because of the huge amounts involved, long repayments periods e.g over 10 years, and complexity of the projects.
iv) The greatest challenge faced by infrastructure projects relates to the time it takes to prepare bankable project proposals, which are used to source funding from investors. Infrastructure projects in Africa take an average of about 7 years from project preparation to development. There is need to shorten this projection preparation period to less than 3 years. The African development bank is already working on an initiative to raise US$500 million by the 1st half of 2014, to help shorten this period.
v) The other challenge in Africa, relates to the high risk profile associated with many infrastructure projects, unfavourable macroeconomic environments and lack of appropriately structured investment vehicles and instruments, which can be used as conduits to channel investments into infrastructure projects.
vi) It was also found that sources of funds per se, are not the major challenge. For instance, it is estimated that US$24 trillion is invested in pension funds alone, globally. Even if 1% of that amount is invested by pension funds in Infrastructure projects in Africa, that would represent a potential investment of US$240 billion.
vii) Due to lack of appropriately and attractively structured infrastructure projects in Africa, most of these funds end up in low yielding offshore bonds, whose yields are benchmarked against the Libor Rate, which is below 1%. For example One year Libor is 0.53%.
viii) International experience from emerging markets such as Malaysia, Chile, Peru shows that infrastructure bonds was made possible because of certain pre conditions that existed which enabled development of capital markets. In Africa, examples include Kenya, which, over the past 4 years, has issued Infrastructure bonds which amount to nearly US$1 billion to finance roads, energy, water, irrigation and sanitation projects.
69. Recommendations of the Study
a) COMESA to set up a Special Purpose Vehicle, which will be the entity responsible for the issuance of CIB. A bond needs an entity that would be authorized by regulatory authorities to issue it on the capital markets. In some cases bonds are issued by Governments, Parastatals, Corporates or SPVs. In the case of CIB, we recommend an SPV. The SPV would issue a series of infrastructure bonds in different COMESA Member States on a project –by-project basis using sub-SPVs.
b) For instance suppose there an infrastructure project that requires US$200 million in one of the COMESA Member Countries. The COMESA Infrastructure Main SPV, could, through a Sub-SPV, issue an infrastructure bond, which is specific to that US$200million project and the cash flows from the project would be ring fenced and used to repay the US$200m infrastructure bond. This is how toll -gates and other infrastructure project could be financed.
c) The same structure would be replicated in other COMESA Member Countries with infrastructure projects that require financing. In summary, it is expected that the COMESA Infrastructure Main SPV would, through sub-SPVs, issue a series of country and project specific Infrastructure bonds, with different yields, maturity periods and other covenants. The only common denominator is that they will all be issued by the COMESA Infrastructure SPV and hence subjected to a similar governance structure, thereby minimizing their risk profiles.
d) Use of an SPV reduces the need to really on government guarantee for infrastructure bonds. The SPV can negotiate with rating agencies to have the bond rated and other multinationals/ developmental institutions for partial credit guarantees, which further makes the bonds attractive to investors.
e) It is further recommended that the SPV will be domiciled in a COMESA Member State, such as Mauritius or similar offshore banking environment. Why- Mauritius- because of tax incentives and no exchange controls, which will make the infrastructure bonds attractive to investors, both regionally and internationally.
f) That the CIBs should be listed on an international stock exchange such as the Stock Exchange of Mauritius. This is intended to boost the liquidity of the bonds and to open it up to a larger base of well capitalized international investors.
Discussions
70. The Ministers of Finance and Central Bank Governors noted the presentation on progress on CIF and COMESA Infrastructure Bond and setting up of the Special Purpose Vehicle.
71. Ministers and Central Bank Governors, however, agreed that the proposal on CIB should first be presented to the Fiscal and Monetary Affairs Committee, that will then make recommendations to the Ministers of Finance and Central Bank Governors for a decision.
Decision
72. The Joint Meeting decided that the CIB report should be reviewed by the Fiscal and Monetary Affairs Committee before submission to the next Joint Meeting of Ministers of Finance and Central Bank Governors
Presentation on Africa 50 Infrastructure Fund ( Agenda item 9)
73. The Secretariat made a presentation on the Africa 50 infrastructure fund which has been set up by the African Development to finance infrastructure in the including financing project preparations. Recently, the AfDB had approved US$68 million for the multinational Inga Site Development and Electricity Access Support Project (PASEL) for D.R. Congo.
74. Increasing the rate of infrastructure delivery in Africa implies a greater focus on project preparation and project development as well as specialized financial tools to address specific market challenges. In response, and after broad consultations with African stakeholders, the African Development Bank had proposed the establishment of a new delivery vehicle called Africa 50.
75. Africa50 is the result of experience and innovation. The vehicle aims at mobilizing private financing to accelerate the speed of infrastructure delivery in Africa, thereby creating a new platform for Africa’s growth. Africa50 will focus on high-impact national and regional projects in the energy, transport, ICT and water sectors.
76. Africa50 will establish two business segments, as follows:
• Project Development: The primary objective of this segment is to increase the number of bankable infrastructure projects in Africa. This will be accomplished through substantially increased funding of early stage project development activities, made possible by innovative partnerships and incentive schemes. Further, Africa50 will make skilled legal, technical and financial experts available to projects from an early stage of development, sharing costs with member governments and developers and recovering its funding at financial close or through a carried interest in the project.
• Project Finance: This segment will focus on delivering the financial instruments required to attract additional infrastructure financing to the continent. These will include, but will not be limited to: i) bridge equity, ii) senior secured loans, iii) refinancing/secondary transactions, as well as iv) credit enhancement and other risk mitigation measures geared at attracting non-traditional funders such as institutional investors and international investment banks.
77. To deliver on Africa’s current infrastructure pipeline, including Programme on Infrastructure Development in Africa (PIDA), Africa50 will need an equity investment of USD 10 billion, thereby attracting USD 100 billion worth of local and global capital.
78. The ownership of the founder’s equity by African countries is central to the strategy of Africa50. Such ownership is intended to send a strong signal to developers and financiers about the commitment of African countries to address the continent’s infrastructure challenges. Africa50 is expected to be fully operational in Q1 2014.
79. The meeting noted the presentation.
COMESA Programme on Domestication and Management of Legal Instruments
(Agenda item10)
80. The Secretariat presented an extract from the Seventeenth meeting of the Ministers of Justice and Attorneys General focusing on the COMESA Programmes on domestication and management of legal instruments. The Ministers and Governors noted the obligations of Member States in implementing the provisions of the Treaty and on the domestication of Treaties and other international legal instruments in national laws.
81. The meeting noted the following decisions made by the Ministers of Justice and Attorneys General:
a) Member States should work with the Secretariat to update information on the domestication of legal instruments at the Member States level;
b) Member States work with the Secretariat to identify capacity building needs in relation to domestication of legal instruments and related management of legal instruments at the Member State Level;
c) Member States assist the Secretariat with the following documents:
i. Copies of legal instruments that have been deposited with the COMESA Official Depository;
ii. Copies of Gazettes through which the domestication of legal instruments of COMESA were published;
iii. Copies of other bilateral trade and investment agreements that member states have notified to COMESA; and
iv. Any other relevant information and related copies in relation to signature, ratification and domestication of legal instruments.
d) Member States should work with the Secretariat to domesticate legal instruments that have not yet been domesticated at the national level for the implementation of related COMESA Programmes;
e) Member States should work with the Secretariat to build capacity at the Member State level in relation to the management and domestication of Legal Instruments;
f) The Secretariat develops a virtual or electronic depository of all COMESA Legal Instruments for easy access by Member States;
g) COMESA Secretariat mobilise financial resources for a capacity building programme on domestication and mangement of legal instruments;
h) The COMESA Secretariat should engage with parliamentarians on the importance of the domestication of legal instruments; and
i) Any capacity building programmes on domestication of legal instruments should include parliamentarians.
COMESA e-Initiatives (Agenda Item 11)
82. In line with the provision of the COMESA Treaty, in particular Annex 1 of the COMESA Protocol on Transit Trade and Transit Facilities, COMESA has over the years made regulations and harmonized policies with the view of facilitating trade through smooth movements of goods in the region. The COMESA work has resulted in a number of instruments being developed and implemented. This includes COMESA Yellow Card, the Transit Data Transfer Module, the COMESA Carrier License for road freight operators, the COMESA Regional Customs Bond Guarantee System, the COMESA Harmonized Axle Load, and Gross Vehicle Mass Limits which includes the COMESA Certificate of Overload Control and the COMESA Customs Declaration Document.
83. Although these programmes have contributed to reducing the cost of doing business, challenges still persist in terms of disruption in the movement of goods. The following are some of the current challenges;
➢ High trucks operating costs that include various direct costs to operate a given truck, notably maintenance, tires, fuel, labour, and capital costs,
➢ Addition of other indirect costs, such as license, insurance, road toll, and roadblocks payment.
➢ Loss of goods during transit
➢ Cargo dumping
➢ Not able to control counterfeit
➢ pilferage
➢ Long transit time,
➢ Long release time,
➢ Delayed clearance at the borders,
➢ Diversion of good in transit,
➢ Non availability of Goods regional bond guarantees for most transporters
84. In order to address these challenges among others and further facilitate trade in the region, COMESA has developed a Virtual Trade Facilitation System (CVTFS) and COMESA Electronic Market Exchange System (CEMES) that integrates the existing instruments into one single sign on which are accessible to Customs, freight forwarders, insurance companies, banks, port authorities, container freight stations and traders to mention but a few
Presentation of the COMESA Electronic Commerce and Trade Facilitation Programme (agenda item 12)
COMESA Virtual Trade Facilitation Systems (CVTFS)
85. The Secretariat delivered a presentation on the CVTFS. The meeting was informed that it is COMESA’s electronic initiative for harmonization of trade procedures on a particular corridor that goes through different countries. This will increase commerce by reducing trade barriers which may have existed between member countries.
86. Delegates were informed that the main objective of the system is to assist Private and Public Sector organizations in the Corridor States to manage and monitor the process of movement of their general, dry bulk and bulk liquids cargos in an effective and efficient manner and in real-time to reduce the cost of doing business in the sub-region. Some of the services to be provided by CVTFS are use of ICT to achieve more transparency and control in the movement of national and international cargo, faster bond clearance and reduction of time taken in movement of goods across the border posts thus reduction in the cost of doing business.
87. During the presentation Delegates were informed that CVTFS consists of 4 key modules which are tracking, data exchange, transit bond and risk management. The modules were explained in detail together with their functions and workflows.
88. The following are some of the benefits of CVTFS presented to the delegates.
The following are the cost benefits to be achieved by stakeholders
a) Reduce theft and Insurance costs for goods in transit
b) Reduce equipment inventories and increase assets security in transit in the COMESA region
c) Reduction in undelivered cargo lost by theft when in transit
d) Easy bond clearance translates to lower bond investments thereby enabling more compliance among clearing agents
e) Fewer customer allowances (late penalties)
f) Eliminate increased expenses from lack of equipment availability by providing quick clearance at border points
g) Increase in revenue collection by customs authorities closing loopholes for diverting of transit goods to local markets
89. The delegates were informed that the pilot of CVTFS has successfully carried–out in the Northern Corridor consisting Kenya, Uganda, Rwanda and Congo DR. Preparation for the extension of the project to Malawi, Zambia and Malawi is almost complete.
COMESA Electronic Market Exchange System (CEMES)
90. A presentation on the CEMES was made by the COMESA Secretariat. Delegates were informed that CEMES is a COMESA initiative to develop a fully-fledged e-business solution in the COMESA region and beyond. The main objective of the project is to bring over 400 million people to a new COMESA Virtual Market to help residents of member states and the rest of the world to buy, sell, market, insure, deliver and receive products and services, wherever they are, in real time at a lower cost and to contribute to poverty reduction. The entire business processes will be automated via the internet.
91. The following are some of the benefits of CEMES presented to the delegates.
a) Delivery of immediate boost to business efficiency
b) Increase the opportunities, reduce cost of sales and services
c) Automation of business processes via the internet and mobile devices
d) Increase COMESA regional customer satisfaction
e) Business will achieves streamlined and faster communication,
f) improved productivity, Product Transportation and Consignment delivery
g) Business partners beneficiaries will be intergraded into seamless
92. The meeting was given a walk-through CEMES & CVTFS. The delegates where shown a live demonstration of some of the functions of the system.
93. The meeting noted the presentation on CVTFS and CEMES..
Any Other Business (Agenda item12)
94. Under this agenda item, the Ministers and the Governors expressed concern on the insufficient participation of representatives from the Ministries of Finance despite their crucial role in the implementation of MFSF.
95. The meeting agreed that in order to address this problem, desk officers would be assigned.
Adoption of Report and Closure of Meeting
96. The meeting adopted its report with amendments.
97. The Chairman thanked the Ministers and Governors on behalf of Her Excellency President Joyce Banda and in his own name for attending the meeting. He underscored the key objectives of the meeting of launching a Convergence Council and moving into live operation of REPSS which were met. He said that the going live on REPSS by the Reserve Bank of Malawi on 19 November 2013 was a great achievement and should be emulated by other Member Central Banks.
98. He thanked the Ministers and Governors for their active participation and wished them a safe journey back home.
99. Dr Haron Sirima, Deputy Governor of the Central Bank of Kenya, moved a vote of thanks on behalf of the Ministers and Governors and on his own behalf. He thanked the Government and people of Malawi and the Reserve Bank of Malawi for the warm hospitality accorded and for the excellent facilities availed to Governors, Ministers and all delegates. He expressed his full confidence on the new Bureau of the Joint Meeting that will no doubt steer the COMESA Cooperation Programme to greater heights.
ANNEX I
The PUBLIC FINANCE MANAGEMENT SYSTYEM (PFM ) High-Level Performance Indicator Set
Overview of the Indicator Set
| |A. PFM-OUT-TURNS: Credibility of the budget |
|PI-1 |Aggregate expenditure out-turn compared to original approved budget |
|PI-2 |Composition of expenditure out-turn compared to original approved budget |
|PI-3 |Aggregate revenue out-turn compared to original approved budget |
|PI-4 |Stock and monitoring of expenditure payment arrears |
| |B. KEY CROSS-CUTTING ISSUES: Comprehensiveness and Transparency |
|PI-5 |Classification of the budget |
|P1-6 |Comprehensiveness of information included in budget documentation |
|PI-7 |Extent of unreported government operations |
|PI-8 |Transparency of inter-governmental fiscal relations |
|PI-9 |Oversight of aggregate fiscal risk from other public sector entities. |
|PI-10 |Public access to key fiscal information |
| |C. BUDGET CYCLE |
| |C(i) Policy-Based Budgeting |
|P1-l1 |Orderliness and participation in the annual budget process |
|PI-12 |Multi-year perspective in fiscal planning, expenditure policy and budgeting |
| |C(ii) Predictability and Control in Budget Execution |
|PI-13 |Transparency of taxpayer obligations and liabilities |
|PI-14 |Effectiveness of measures for taxpayer registration and tax assessment |
|PI-15 |Effectiveness in collection of tax payments |
|PI-16 |Predictability in the availability of funds for commitment of expenditures |
|PI-17 |Recording and management of cash balances, debt and guarantees |
|PI-18 |Effectiveness of payroll controls |
|PI-19 |Competition, value for money and controls in procurement |
|PI-20 |Effectiveness of internal controls for non-salary expenditure |
|P1-21 |Effectiveness of internal audit |
| |C(iii) Accounting, Recording and Reporting |
|PI-22 |Timeliness and regularity of accounts reconciliation |
|P1-23 |Availability of information on resources received by service delivery units |
|PI-24 |Quality and timeliness of in-year budget reports |
|PI-25 |Quality and timeliness of annual financial statements |
| |C(iv) External Scrutiny and Audit |
|PI-26 |Scope, nature and follow-up of external audit |
|PI-27 |Legislative scrutiny of the annual budget law |
|PI-28 |Legislative scrutiny of external audit reports |
| |D. DONOR PRACTICES |
|D-1 |Predictability of Direct Budget Support |
|D-2 |Financial information provided by donors for budgeting and reporting on project and program aid |
|D-3 |Proportion of aid that is managed by use of national procedures |
ANNEX II
Public Finance Management ( PFM System)
Prioritizing and Sequencing
| Phase I | Phase II | Phase III |
|Review existing PFM System |Review progress in Phase I |Review progress in Phases I & II |
|Improve orderliness and participation in annual budget | | |
|process (especially nature, scope and role of | | |
|Legislature)- P1-11 | | |
|Improve comprehensiveness of information included in | | |
|budget document | | |
|Broaden classification of budget (Program-based)- P1-5|Broaden budget classification to include performance |Performance budgeting (full |
| |budgeting (Pilot-basis) |implementation) |
|Provide multi-year perspective in fiscal planning , |Improve MTMEF, MTFF; prepare MTBF and pilot MTEF |MTMEF, MTFF, MTBF, and MTEF |
|expenditure policy & budgeting (MTMEF, MTFF)- P1-12 |(linkage between expenditure and results). Debt |comprehensive set of MT fiscal policy |
|Embed regional trade integration with MFSF via MTTIF[1]|Sustainability Analysis and policy |perspective & monitoring |
|Improve taxpayer registration, assess, and collection |Improve control of government revenues | |
|of tax payments- P1-14, 15 | | |
|Improve timeliness, and predictability in the | | |
|availability of funds for expenditure commitments- | | |
|P1-16 | | |
|Improve recording and management of cash balances, debt|Centralize cash management, debt and guarantees | |
|and guarantees- P1-17 |obligations | |
|Improve Internal expenditure controls and audit.- |Phased introduction of revised COA commensurate with|Full introduction of the revised COA |
|P1-18, 20, 21 |phasing in of performance budgeting |Full implementation of IFMS[2] |
| |Conceptualize IFMS and begin phased implementation | |
|Improve timeliness and regularity of accounts | | |
|reconciliation- P1-22 | | |
|Improve quality and timeliness of annual financial |Improve quality and timeliness of in-year budget | |
|statements- P1-25 |reports P1-24 | |
|Improve public access to key fiscal information- P1-10|Improve and expand availability of fiscal information|Improve and expand availability of |
| |to public |fiscal information to public |
|Improve competition, value for money, and controls in |Strengthen Procurement Office and procedures |Strengthen Procurement Office and |
|procurement. P1-19 | |procedures |
|Improve scope, nature and follow-up of external audit. |Improve external audit reports and follow-up |Improve external audit reports and |
|P1-26 | |follow-up |
ANNEX III
Enabling Environment
PFM System
Enabling Environment
|Legal Framework | Actors |Institutions/Instruments |
|Constitution |Ministry of Finance |Fiscal Unit (Budget Office and macroeconomic modeling |
| | |office) |
| | |Debt Management and Planning Department |
|Budget Law System |Cabinet |Revenue Authority |
|Budget regulations |Line ministries |Single Treasury Account |
| |Legislature (PAC) |PACs, Budget Evaluation Office |
|9 |Accountant General |Medium-Term Frameworks |
| | |(MTMEF, MTFF, MYBF, MTEF) |
| |Internal Accounts Officers |Top-down budgeting |
| |Supreme Audit Institute (SAI) |Fiscal reporting |
| | | |
| | |Chart of Accounts |
| | |IFMS |
ANNEX IV
FISCAL RESPONSIBILITY LAW ( FRL) TEMPLATE
|Stability |Convergence |Transparency |Accountability |Foreseability |
|Medium-term |Medium-term Budget |MTMEF, MTFF, MTBF |Medium-term Expenditure |Comprehensiveness; |
|Macroeconomic Framework (MTMEF) |Framework (MTBF) |Annual budget |Framework (MTEF) |Minimum escape clauses; |
|Fiscal Framework (MTFF) |National and Regional | | |Parliamentary approval for change|
| |targets) | | |in Fiscal Rules; |
|Underlying assumptions: | | | |Public explanation of report |
|GDP growth; | | | |explaining |
|Inflation; | | | |changes in Fiscal rules; |
|Savings $ Investment; | | |Quarterly budget | |
|Current account balance |Performance Assessment |Macroeconomic and |developments |Top-down budget; |
|Exchange rate |reports |macroofiscal reports; |Bi-annual review of |Treasury Single Account; |
| |(as per COMESA |MT fiscal strategy |budget outcome- |Supreme Audit Institution; |
| |reporting forms); |statement; |Audited results of |Independent Fiscal Councill |
| |Convergence Council |Budget policy statement |previous year’s | |
| |reports |(existing and |budget outcome | |
| | |new policies and their |Mid-year pre-budget | |
| | |budgetary impact); |report; | |
| | |Tax expenditures; |Table and publish CG | |
| | |Consistency with MT |reports to parliament | |
| | |frameworks, | | |
| | |Risk analysis and | | |
| | |remedial measures, | | |
| | |Debt Sustainability | | |
| | |Analysis, (DSA), | | |
ANNEX V
Terms of Reference
The following are the Terms of Reference of the Convergence Council
1. Based on above considerations, the paper proposed the following TOR for the Convergence Council”
i. Composition: The Convergence Council will consist of the Ministers of finance, and the Governors of central bank/monetary authority, of Member States;
ii. The Convergence Council shall:
a. be responsible for the development of COMESA regional programs and action plans in the fields of finance and monetary cooperation;
b. monitor and keep under constant review, and ensure the proper implementation of, programs and plans adopted on monetary and finance cooperation; pursuant to the provisions of the Treaty establishing COMESA;
c. focus its surveillance of program implementation on fiscal performance of Member States in respect of deficit and debt ratios, and those aspects of regional trade integration that have impact on Member States’ fiscal integration policies and intra-regional competitiveness;
iii. In view of the above the Convergence Council will require that Member States formulate and implement a rolling Medium-term Country Convergence Program (MTCCP)[3], incorporating annual targets and policies that is reviewed and approved by the Convergence Council as being consistent with regional integration objectives, and presented to national assembly for endorsement/enactment. The Convergence Council will assess Member State’s performance against the targets and policies inscribed in that program.
iv. The surveillance function of the Convergence Council will have three arms: ‘preventive’, ‘promotional’ and ‘corrective’. The preventive arm will consist of requiring member countries to submit to the Council appropriate information on the progress in implementing their respective convergence programs that will be subject to ‘peer review’ in the Council. The promotional arm will comprise the availability of funds from the COMESA FUND, and the Infrastructure Development Fund, as well as assistance in exploring and securing needed technical assistance, The corrective arm of the surveillance will have a potential corrective instrument in the form of “Excessive Slippages Procedure” (ESP) to be launched in case a Member State is assessed by the Council to have incurred ‘excessive’ slippages in meeting its ex ante targets for the budget deficit, and debt ratios;
v. The Convergence Council will establish appropriate institutions and procedures for Member States to report to the Secretary-General of COMESA, at least each quarter, financial and monetary developments, and other information the Convergence Council may consider necessary for the discharge of its surveillance functions. At the end of each year, but prior to the annual assessment by the Convergence Council, the member State will also be required to submit to the Council a ‘self-assessment’ report on its progress in implementing the annual convergence program as an input into the surveillance exercise;
vi. The Convergence Council will establish appropriate procedures to facilitate bilateral communication of documents and data, and ‘consultations’, between the Governing Council, or its designated organs, and Member States on fiscal and other macroeconomic developments, and progress in the implementation of the MFCCP; in member countries that would feed into the annual (and mid-year, if necessary) assessment reports by the Secretary General to the Convergence Council on Member State performance in respect of their convergence program;
vii. The Convergence Council will require the Secretary-General to submit annual reports, or in-year reports if necessary, assessing the fiscal performance of each Member State and recommending whether its performance is satisfactory as compared to the targets and policies in the MTCCP , or has recorded ‘excessive slippages[4]’ in the achievement of its fiscal targets. And, if so, to make recommendations regarding corrective measures the Member State should take to bring the program on track;
viii. In considering the Secretary-General’s report, where the SG has reported ‘excessive’ slippages by a MS, the Convergence Council may invite outside bodies, such as the IMF and the World Bank, to participate in its deliberations and provide their assessment of the Member State’s economic and financial situation along with possible corrective measures;
ix. The Convergence Council will take formal decision, ‘concluding’ its assessment of the Member State’s progress in implementing its convergence program. The Council will take the decision, whether the MS has incurred excessive slippages, by a qualified majority of 2/3rd of the Member States present, each State having one vote. If the MS is placed under an ESP decision, the Council will forward its decision along with recommendations about the corrective measures the country should undertake within a specified time frame, and in accordance with the modalities.
x. The above-mentioned document on Excessive Slippages will form an integral part of the terms of Reference of the Convergence Council;
xi. The Convergence Council will require that its surveillance reports and decisions, regardless of whether they involve ESP or not, will be made available to the public within two months after it has been sent to the Member State concerned. The publication of the report will be automatic unless objected to by the Member State and its objection is supported by two-thirds of the members who participated in the review process. The Member State should also be required to table the report before its national assembly.
xii. Convergence Council will explore with the African Development Bank, IMF, and the World Bank the feasibility and modalities of their participation in the assessment process, including providing necessary documentation, technical assistance, and participating as observers and technical advisers in the deliberation of the Council.
xiii. Convergence Council will report directly to the Authority of the Heads of State concerning the implementation of the Monetary Cooperation Programs, and communicate any decisions taken under the ESP.
ANNEX VI
Action Plans for the Implementation of COMESA
Multilatéral Fiscal Surveillance Framework
Action Plans For The Implementation Of The COMESA Multilateral
Fiscal Surveillance Framework
(2013 – 2018)
|Action Points | | |
| |Expected Output |Indicators |
|Short term (2013) |Medium Term |Long Term (2016 & Beyond) | | |
| |(2014-2015) | | | |
|Member State Level | | |
|1. Establish and make |1.Assess and seek capacity | | | |
|operational Surveillance Unit |enhancement needs of the surveillance| | | |
|in Ministries of Finance as |unit | | | |
|Focal Point for MFS matters | | | | |
|2. Draft Fiscal Responsibility|2. Enact FRA along with necessary | |Effective surveillance |Fiscal responsibility |
|Act (FRA), including fiscal |institutional arrangements and make | |procedures increase |Act |
|rules. |it operational | |accountability and | |
| | | |transparency | |
|3. Undertake review of PFM |3.Formulate and begin implementation |3. Review the |Robust PFM system |PEFA Scores. Number of |
|System by seeking PEFA exercise|of PFM reform programme to reach at |implementation and status | |PEFA Assessment. |
|or, if unable to do so, by |least an average score level of “B”. |and continue further | |Guidelines on minimum |
|self-assessment identifying |All member countries should have had |reforms to improve PEFA | |requirements for Robust |
|areas of improvement and |at least one complete PEFA exercise |Scoring | |PFM |
|capacity needs to meet at least| | | | |
|the minimum requirement for | | | | |
|Robust PFM System as indicated | | | | |
|in attached Templates | | | | |
|4. Establish fiscal Rules |4 Budget conformity to fiscal rules |4. Budget conformity to |Fiscal stability |Budget balance, debt |
|(including budget deficit and | |fiscal rules | |ratios |
|debt ratio) | | | | |
|5. Formulate jointly by |5 |5. Along with continued |Pilot performance based |Budget document |
|Ministries of Finance and |Formulate and implement Medium Term |updating of MTMEF, MTFF, |budgeting, value for money,|implementation report, |
|Central Banks, revolving |Budget |and MTBF formulate and |increased accountability |MT Frameworks |
|Medium Term Macroeconomic |Framework (MTBF) |implement MTEF in | | |
|Framework (MTMEF) and Medium | |conjunction with advanced | | |
|Term Fiscal Framework which | |budget classification | | |
|should guide formulation of | | | | |
|future budgets. | | | | |
|5 Formulate and implement |5.First Assessment of progress under |5Self-assessment Report on |Multilateral fiscal |Country self assessment |
|jointly by Ministries of |MTCCP |MTCCP, implementation and |surveillance exercise |implementation report, |
|Finance and Central Banks | |surveillance review by |increased |convergence Council’s |
|revolving Medium term country | |convergence Council | |surveillance report – |
|convergence programme (MTCCP). | | | |both in public domain |
|Approval of MTCCP by the | | | | |
|convergence Council and | | | | |
|national legislature | | | | |
|6 Formulate and implement |6.Review and continue implementation |5. Review and Continue |Increase in intra-regional |Implementation report. |
|revolving Medium Term Trade |of MTTIF |implementation of MTTIF |trade in goods and services|Country ranking in World|
|Integration Framework MTTIF) | | | |Bank’s Doing Business |
| | | | |Index. |
|7. Establish National |7..Harmonise concepts , methodologies|7. Fully implement the |Level playing |Reporting forms from |
|Coordinating Committee |and statistical framework |harmonized framework |field-assesment of |member states, |
|comprising Ministry of Finance,| | |convergence program |convergence council’s |
|Central banks, and Statistical | | |implementation,better |surveillance reports |
|Office to harmonise | | |informed regional | |
|macroeconomic data reporting | | |surveillance. | |
|based on international best | | | | |
|practices | | | | |
|8.. Initiate preparation of |8.1. Start preparation of half yearly|8. Continue reporting |Strengthen Fiscal | Implementation reports |
|half yearly country economic |reports | |Surveillance | |
|reports by the National | | | | |
|Coordinating committee as part|8.ESA put half yearly Country | | | |
|of strengthening surveillance |Reports in COMESA Web-site | | | |
|mechanism | | | | |
| |
|Regional Level |
|1, Review legal implication of |Legalise the required changes | |COMESA Treaty amended by taking|COMESA Treaty |
|implementing proposed | | |into account the implication of|amended |
|Multillateral Fiscal | | |the proposed Multilateral | |
|Surveillance Framework (e.g. | | |Fiscal Surveillance Framework | |
|Treaty Revision; institutional | | | | |
|arrangements and new | | | | |
|institutions | | | | |
|2. Finalise Terms of Reference |2. Formally establish the Convergence|2. Convergence Council | Progress in fiscal convergence|Terms of reference |
|of the convergence Council |Council |fully operational | |for COMESA |
| | | | |Convergence Council |
| | | | |approved by the |
| | | | |Joint Committee of |
| | | | |Ministers of Finance|
| | | | |and Central Bank |
| | | | |Governors |
|3.Finalise implementation |2.Launch the assessment process | |Achievement of MTCCP targets |Convergence Council |
|guidelines for Excessive | | | |Report |
|Slippages Procedure(ESP) | | | | |
| | | | | |
|4.Formalise establishment of |4.Operationalise COMSWAP once | | | |
|COMSWAP Facility and its |specified preconditions are set | | | |
|operational modalities | | | | |
|5. Establish and make |Assess and seek capacity enhancement | |Fiscal Unit established |Fiscal Unit |
|operational Fiscal Unit in |needs of the Fiscal unit | | |operation |
|COMESA with specified TOR | | | | |
|6. Create regional Coordinating|6.1. Complete statistical | | | |
|Committee for harmonization of|harmonization exercise. All Member | | | |
|Concepts, methodologies and |country reporting to be done on the | | | |
|statistical framework for |harmonized basis. | | | |
|reporting data required for | | | | |
|surveillance purposes |6.2. Create COMESA data base on | | | |
| |Harmonised macroeconomic data | | | |
ANNEX VII
DRAFT POLICY PAPER ON INCLUSIVE GROWTH IN THE COMESA REGION
Introduction
1. The goal of regional integration of the COMESA region is to achieve sustainable growth and development of COMESA Member States. One of the mandates of the region, as contained in the COMESA Treaty, clearly specifies the aim as “to attain sustainable growth and development of Member States by promoting a more balanced and harmonious development of its production and marketing structures” (Article 3(a) of the COMESA Treaty). This aim is coupled with other objectives for the promotion of joint development in all fields of economic activity, including in the adoption of common economic management policies; the promotion of agreed common positions for attracting investments; the strengthening of relations between the Membership of COMESA and cooperating third parties; the promotion of peace, security and stability among Member States for the express purpose of enhancing economic development in the region; and contributions towards the realization of the broader continental agenda of Africa wide integration into one continental economic community.
2. Globally, while policy makers over the years have generally tended to promote economic expansion as the panacea for prosperity and poverty reduction, particularly in the developing and the emerging world, there have been failures to recognize that growth is a means to an end, rather than an end in itself (see The Growth Report)[5]. Growth can be an unpredictable weapon in the fight against inequality and poverty. In some cases it has been more effective in delivering poverty reduction in some countries than in others, and at differing rates. This is because in countries as diverse as in Asia, Latin America and Africa, inequalities and poverty have been shown to have risen as much as there has been growth. It has been claimed that poverty reduction is almost twice as responsive to economic growth in East Asia as in sub-Saharan Africa, because structural inequalities matter in translating growth into poverty reduction. Others have also argued that the rate of improvement of almost all quality of life indicators that are commonly used in the analysis of growth and development is only weakly related to the rate of economic growth.
3. In the wake of recent and successive global economic, food and fuel shocks/crises and as the deadline to meeting Millennium Development Goals (MDGs)[6] approaches at the end of 2015, the international community is once again trying to redirect focus towards growth, although this time apparently after realizing that the type of growth that should be espoused matters in shaping new avenues for restructuring and redefining the path of the appropriate future growth required. That is why the new theme that has underpinned ongoing growth discussions has moved to what is now known as “inclusive growth”[7]. However, to date, the challenges of growth per se have yet to be taken on with a clear perspective since policy makers have not shifted their approach and perceptions about the need to meet a host of challenges of growth and development in the 21st century[8].
4. In spite of the above, there have been important successes recorded on growth and development in the past half-century, which were accompanied by global progress in health, education, civil rights, etc. Since 1960, global average infant mortality has halved; between 1970 and 2000 the global average ratio of female to male literacy improved significantly from 59 to 80 per cent; the overwhelming majority of people now live in countries that have signed the UN Universal Declaration of Human Rights; and Africa as a continent has observed some improvement in governance and accountability, even in some countries where prospects initially appeared to have been least promising (e.g. in landlocked Mali, for example, since the mid-1990s infant mortality has declined by a quarter, the primary school completion rate has doubled, and poverty has fallen by one-third).
5. In the wake of the recent global shocks, at least some moderate growth is expected to continue in both emerging economies and low-income countries (LICs), unlike in the advanced economies, even though, in many respects, the challenges of development – and in particular, associated risks posed- are arguably more difficult to address than in the past. This is in part due to current increasing interdependence between countries and as a result, countries and their people have tended to become more vulnerable to economic and climactic shocks against which “belts have tightened” so as to access scarce resources (such as land, food, and water etc.).
What has been the grand picture/pattern of economic growth in Sub-Saharan Africa?
6. A generalization of the grand picture suggests that many countries in Sub-Saharan Africa witnessed some reasonable economic growth during the decade beginning 2000 or so. This growth has in fact been more visible in Sub-Saharan Africa than in the OECD-area[9] despite the persistent adverse shocks that have affected the global economic environment[10]. However, this does not discount the fact that growth has differed widely among countries in the region. For instance, while Angola, Ethiopia and Mozambique displayed strong growth, the economies of Burundi, Malawi and Zimbabwe seemed to have struggled and not benefitted substantially from the overall jump in growth experienced in the Sub-Saharan region after 2000[11].
Defining inclusive growth
7. Inclusive growth refers to both the pace and pattern of the economic growth. The literature on the subject draws a fine distinction between the commonly used notions of direct income redistribution, shared growth and inclusive growth. The inclusive growth approach takes a longer term perspective as the focus is on productive employment rather than on direct income redistribution as a means of increasing incomes for excluded groups. Inclusive growth is, therefore, supposed to be inherently sustainable as distinct from income distribution schemes, which can, in the short run, reduce undesirable disparities between the poorest and the rest. So, while income distribution schemes can allow people to benefit from economic growth in the short run, inclusive growth tends to assist people to “contribute to and benefit from economic growth” as a whole over a longer term period.
8. The notion of ‘inclusive growth’ as a strategy of economic development received attention owing to a persistent rise in concerns about the fact that benefits of economic growth have not been equitably shared. The concern here entails that growth should be inclusive when it creates economic opportunities along with ensuring equitable access to them. Apart from addressing the issue of inequality, inclusive growth may also make poverty reduction efforts more effective by explicitly creating productive economic opportunities for the poor and vulnerable sections of the society. Hence, by encompassing the hitherto excluded population, inclusive growth can bring in several other attendant benefits as well to the economy.
9. The debate about what it is that inclusive growth infers and indeed how the notion can be applied to evaluate growth and development outcomes in general terms is vast and raging on. This debate, in part, has been sustained due to the fact that the underlying applicability of the notion may differ from one country or agency to another depending on their unique conditions, circumstances and motivations. A rather more accommodating definition is now beginning to emerge, which tries to account for most of the relevant elements traditionally associated with the understanding of economic growth and development literature. This definition can be presented in the following context: “Inclusive growth basically means broad based, shared and pro-poor growth”. It is supposed to facilitate a decrease in the rise of poverty in a country and increase the involvement of people into the growth process of the country. By its very definition, it implies the equitable allocation of resources with benefits accruing to every section of society that should include, in the short to long term, the availability of goods and services, employment opportunities for all sections of society (especially the disadvantaged) and the improvement of standards of living.
The literature and evidence
10. The literature on inclusive growth has been evolving. This paper seeks to assess only some reflections on inclusive growth based on a selection of literature that has drawn conclusions with a bearing on the record and interpretation of how “inclusive growth” has evolved in Africa, the Sub-Saharan and the COMESA region. The findings of the literature generally point towards the necessity of delivering inclusive growth through a wide range of instruments. The instruments suggested have included policies that can be used to trigger progress in inclusive growth, particularly in developing countries. The empirical literature has also focused its work largely on the record of Africa’s growth in the post-1960 era, mainly because of the availability of comparable cross-country data on contemporary nation states of the developing world.
11. Simple cross-country averages have tended to suggest, at best, a story of modest progress. Human development indicators showed an improvement over the 40-year period, and real GDP per capita rose by 60 percent. But on a deeper look, the record is profoundly unsettling. Non-African growth consistently outpaced African growth after 1960, with the result that Sub-Saharan real incomes fell by over 35 percent relative to incomes in other developing regions, and by nearly half relative to industrial countries. Human development gaps widened over time rather than narrowing, and Africa’s cumulative progress was insufficient, by 2000, to reach the levels of human development the rest of the developing world had already attained in 1960[12].
12. More troubling though was the picture of deprivation that emerged from a continent-wide perspective. Cross-country averages tended to obscure the impact on African populations of slow growth in the continent’s largest countries. Average real income per capita for the region as a whole barely increased between 1960 and 2000. Moreover, household survey data suggested a sharp increase in income inequality over much of the period. In terms of slow overall growth, this meant an increase in income poverty. At the turn of the millennium, nearly half of the Sub-Saharan African population fell below an income poverty line of $1.50[13] per day.
13. Two research questions seemed to have pre-occupied the motivations behind the above findings. One, what were the key growth options, opportunities and attendant constraints faced by the Sub-Saharan Africa region after 1960? And second, what were the possible explanations that can be advanced for the success or failure in taking advantage of the opportunities available then? An influential and comprehensive research that investigated the African economic growth performance between 1960 and 2000 found a number of peculiarities about the pattern and conduct of growth in Africa during that period. By combining global evidence on determinants of growth with country-specific behavior of firms and households, the organization of markets and the political economy of policy and institutions, the researchers used a two-stage approach on cross-country models to first cast country specific growth patterns and behavior in comparative perspectives in order to identify major proximate determinants over time. This was then followed by the task of marshalling the evidence on why and how the determinants of growth evolved in the manner they did[14].
14. The findings identified some broad “anti-growth syndromes” that emerged consistently from country specific evidence. A couple of these were classified directly as being attributed to choices of incumbent state actors at the time in the form of controls or regulatory regimes that severely distorted productive activity, and ethno-regional redistribution regimes that compromised economic efficiency in the process of resource generation. But certainly, one feature of the findings showed that after 1960, incomes in African developing countries seemed to diverge substantially from the incomes of other developing non- African countries, even though it must be understood that the divergence was not solely an African phenomenon because there were indeed dramatic exceptions in the African region[15].
15. The lessons learnt from the findings are both powerful and insightful, mainly from the point of view of interpreting growth behavior in Africa in the past. The first lesson learnt relates to the critical role of core functions in any growth strategy. This is the single most important choice for closing the growth gap between Africa and other regions. The second relates to misjudgments that led to the under-provision of critical public goods. While African countries often do face unusually high natural and locational impediments to growth, those disadvantages should not be perceived as destiny because they can be offset by appropriate investments and public policy choices, the domain of which is partly national and partly regional. The third relates to shifting human-resource platforms for growth, which means reverting to educational thresholds and parameters of demographic change. These are two areas that could turn out in favour of Africa by opening new potential growth opportunities in the future horizon.
16. There are also other strands of inclusive growth literature and analysis worth making reference to in this text. The thinking embodied in this strand of literature concerns the common barriers to poor people’s participation in the growth process and the policy responses required to promote inclusive growth. The following is an account of how some of the remaining weaknesses could be addressed in a long term manner in order to deliver long term economic opportunities, creation of equal access to opportunities for all segments of society (particularly for the poor) and the generation of productive employment.
17. There are various barriers and constraints to poor people’s participation in the economic growth process as has been identified in the literature. These barriers include: geographical location factors mainly because the poor in the African continent live mostly in remote (often rural) areas that are relatively less catered for by public policies; infrastructure and services; human capital factors that impinge on or limit investments in human technical skills in a manner as to constrain the scope of participation by the poor in labour; barriers to access to credit and product markets; impact of a substantial informal sector that pervades the African economy; and the state of the poor health of the population, which inhibits the availability and productivity of labour. In other respects, the literature also cites barriers that include: demand and supply side constraints which are partly complicated by geographical location factors; concerns about economic insecurity which introduces inherent vulnerabilities of the poor segment of society to risk taking and the adverse impact of market failures; and imperfect information and lack of access to markets for goods produced by the poor; among many others.
18. On account of the above inherent inhibitions to inclusive growth in Sub-Saharan Africa, the literature also tries to advance a whole range of policies that can be used or applied in the pursuit of inclusive growth and long term development. These policies include, among others:
a) The creation of enabling environments to help span business activities and investment especially in technology and innovation;
b) Design of comprehensive plans for the redistribution of public expenditures and social protections;
c) establishment of concerted programmes for human capital and job creation to help strengthen capabilities mainly through higher education; development of broad-based sectoral growth programmes that should benefit the poor directly, particularly in the agricultural sector; and
d) Introduction of appropriate rural infrastructure and agricultural technologies that is necessary for developing rural economies and for providing rural populations with opportunities to access markets, basic services and source employment and income opportunities.
So, what does the literature actually tell us?
19. In general, a number of intuitions emerge from a range of empirical investigations of the conduct of growth over the years and what “inclusive growth” should really entail. This was to attempt generate logical ideas about what ought to be done in order to realize growth in inclusive and material terms over the long term for the good of the people of the Sub-Saharan region. The conclusions drawn from the extensive studies seemed to point to the following:
a) First, a high rate of growth over extended periods of time is a necessary condition and often the main contributing factor for reducing poverty in Africa. This is simply because a great deal of growth that has manifested itself has been in the growth of average incomes, and this growth in average incomes seems to explain nearly 70 percent of the variation in poverty reduction (as measured by the headcount ratio) in the short run, and as much as 97 percent in the long run. The small remainder of the variation in poverty reduction is probably accounted for by changes in the distribution of poverty, with only a negligible share attributed to differences in the growth elasticity of poverty.
b) Second, sustained and high growth rates and poverty reduction can be realized only when the sources of growth are expanding, while an increasing share of the labor force is included in the growth process in an efficient way. Heuristically and from a static point of view, growth associated with progressive distributional changes may have a greater impact in reducing poverty than growth which leaves distribution unchanged. The evidence in the literature suggests therefore that in a significant number of cases, the issue of distribution has been as important as growth itself in explaining the pattern of income growth of the poor.
c) Third, some kinds of policies may have nurturing and positive effects on both growth and inequality. The empirical cross-country literature determined that growth has neither a positive nor a negative effect on inequality, and that the impact of inequality on growth is relatively ambiguous.
20. The above intuitions may not necessarily imply the absence of links between growth and inequality when considering the impacts of a specific policy or a specific country. Rather, the empirical literature seems to suggest that the element of macroeconomic stability (in the context of inflation and fiscal prudence) as well as education and infrastructure related policies appear to deliver ‘super pro-poor’ policies that have both positive effects on growth and a negative effect on inequality. Moreover, asset inequalities rather than income inequality may matter for growth outcomes. This is because it has arguably been suggested that the use of land distribution arguments as a proxy for asset inequality has showed that high asset inequalities may have significant negative effects on growth.
21. There were however some criticisms advanced against the earlier cross-country literature on both growth and pro-poor growth, and those criticisms were based mainly on the perception that the body of literature was not used to provide sufficient and efficient guidance to policy makers, mainly in Africa. This is because much of the so-called pro-poor growth programmes that had been undertaken in the region tended to focus more on aggregated income and poverty statistics that are configured to measure to what extent growth would facilitate the reduction of poverty or indeed whether the analyses could credibly assist in discerning whether and why poverty can be reduced in absolute or relative terms.
22. Following this criticism and beginning 2000 onwards, a new effort was launched in the literature to revisit and identify growth episodes in many developing countries, including in Africa. This new effort was effectively aimed at ferreting out constraints to future economic development. As a result, many studies came up with new conclusions and advice to the effect that growth determinants generally are highly dependent on initial conditions such as levels of income, poverty, and asset inequality, but there are also a host of other factors such as geography, demography, governance, politics, social considerations, the state of employment and job opportunities, and a set of existing policies depending on the countries involved. These policies may differ not only between countries, but also over time and within the same country.
23. The work of the Growth Commission of the World Bank concluded in 2005 came out clearly to point out that although there are agreed necessary fundamentals for growth, such as a stable macroeconomic environment, openness to trade, effective government and others are key factors in the growth process, they are not entirely the whole story. The Commission highlighted a range of diverse ways in which growth fundamentals can interact with policies and institutional setups in different country contexts. The report also suggested that what should be ideal for fostering growth in its entirety is to target the distortion to growth associated with the biggest multiplier effect and therefore one with the largest direct welfare impact. In this case one of such distortions may relate to employment and job opportunity conditions.
Lessons learnt
24. Certainly, there are a few important lessons learnt from the successive analytical work conducted over the decades on the topic of growth and its prognosis over time, particularly in so far as the results of the work pertain to the understanding of Africa’s own growth story. For the benefit of growth and development policy makers in Africa and the COMESA region, one of the important lessons learnt was that economic growth and development policy, in general, is largely country-specific, and it may involve or require only just a few fundamental reforms that can be optimally sequenced to relax binding constraints, so as to trigger larger positive welfare impacts[16].
25. One of the important attributes of the literature, which is perhaps most relevant to the interest of the COMESA region at this point in time, concerns the role of policies and actions targeted to advancing inclusive growth which can generate employment opportunity for enhancing the welfare of individuals and labour providers. In the scope of the conclusions, inclusive growth in particular is determined to espouse a distinct character that focuses on both space and pattern of growth associated with poverty reduction, and that for this kind of growth to be sustainable in the long run, it should increasingly be broad-based across sectors and inclusive of the large part of a country’s labour force. It is in this sense that inclusive growth is directly linked with macro and micro determinants. This is the sense by which inclusive growth captures the significance of structural transformation for economic diversification. Inclusive growth is therefore said to be about raising the tempo of growth, as much as it is about enlarging the size of an economy, while rendering the playing field level for investment and increased productive employment opportunities to flourish.
26. Policies to achieve inclusive growth should therefore form an important component of all government strategies for sustainable growth and the creation of productive employment. This is based on the underlying assumption that the growth can generate in employment and boost incomes of individuals from earnings in all types of employment- firms, self employment and the public sector- as productivity growth helps to raise average wages. However, it is also rational to assume that the ability of individuals to be productively employed depends on the opportunities to make full use of available resources as the economy evolves over time. In this case, inclusive growth should build the scope for strengthening productive resources and capacities of labor suppliers as a means of opening new opportunities for productive employment on the side of labor or factor demand.
COMESA’s experience
The COMESA region’s strategy for regional integration and inclusive growth is based on development integration. This strategy encompases both market Integration and production (or project-directed) integration approaches. . The market Integration approach relates to the integration of markets through trade liberalisation via the removal of both tariff and non-tariff barriers to commercial interaction and investment. This approach is designed to lead to the achievement of full economic co-operation through a gradual process starting with the creation of a free trade area, customs union, followed by the establishment of a common market and ending with an economic community.
27. The production approach focuses mainly on co-ordinated planning and implementation of productive activities, while the development integration approach includes elements of both production and market integration approaches, but specifically emphasizes equitable development through compensatory and corrective initiatives and incentives. As a result, the COMESA strategy is therefore geared towards the integration of the economic space through the removal of trade and investment barriers.
28. Although COMESA has made good progress in respect of the above approaches, a new focus and momentum should now be shifted in the next decade and beyond on development integration. This means giving increased prominence to the supply side of integration, namely investment in the productive sectors. The shift in emphasis is intended to comply with developments both at the global and regional level. Globalisation in general and trade liberalisation under the multilateral regime in particular is now pushing countries to remove trade barriers and open up their markets. Regionally, COMESA trade and investment promotion programmes have improved the investment environment by making it more attractive for investment in productive sectors.
29. The attainment of full integration and the implementation of the COMESA mandate under the Treaty are viewed as a long term objective. In the short to medium term, emphasis has been directed to programmes focused activities mainly on trade development and investment, specifically in relation to the elimination of impediments to trade and investment. Under the programme on investment and development integration, the private sector is expected to play a central role so as to allow individuals and small firms the necessary space to play their rightful roles as the main drivers of economic growth and regional integration in the region.
30. In light of the above and for a considerable period of time now, the COMESA region has, within the framework of its regional integration agenda and medium term strategies, been involved in planning and delivering focused programmes that are designed to advance inclusive growth in the region. These programmes are amenable to a growth and development model that is intended to lift the majority of the people of the region from poverty through targeted wealth-creation programs. Already, there are a range of such programmes that cover trade facilitation and interconnectivity programmes that are intended to deepen the regional market. Some of the programmes include the elimination of duties and quotas and mechanisms for addressing NTBs; improvement of macroeconomic and political stability; initiating programs for rural transformation and wealth creation for the ordinary people; and the attraction of investment. This is apart from COMESA pursuing a decisive programme of structural transformation to achieve inclusive growth, which is expected to ensure sustainable and inclusive growth in the region through the acceleration of the path of growth; prioritization of people–centred growth for the poor, the marginaliszd and vulnérable groups; and the promotion of decent jobs and rural development.
31. The following are some key programme areas which COMESA has been undertaking and these are discussed separately below. COMESA’s overall ambition of realizing inclusive growth is partly couched on the spirit of trade development in the region, and as a result many COMESA programme priorities have been shaped and implemented in line with the objective of delivering growth through trade development and associated programmes.
Trade development
32. The overriding objective of COMESA is ultimately to create a fully integrated and internationally competitive and unified region in which goods, services, capital and persons move freely. The path for achieving this ultimate goal lies in the strengthening and deepening of COMESA’s regional integration through the pursuit of trade and investment. The instrument of trade development in turn lies in orderly trade liberalisation and the freeing of market forces. The favourable result for COMESA should be the emergence of a regime where resources are allocated efficiently in the economies of Member States leading to incremental trade creation. This market approach essentially drives the efficient allocation of resources of the economies of the Member States leading to trade creation, economic expansion, investment growth and region-wide production integration. The following are the dedicated programmme priorities set out under the trade development objective, and discussed separately.
a. The formation of a COMESA Free Trade Area- the formation of the COMESA FTA since 2000 has been a key opener for trade liberalisation in the region. Its elements include the removal of tariff and non-tariff barriers to intra-COMESA trade. The simplified trade regime which enables small scale cross-border traders to benefit from the COMESA trade preferences is one programme that provides an opportunity for this section of society to improve their incomes. The FTA has created a larger market for goods and services and increased intra-COMESA trade between Member States. In addition, it has also induced incentives for attracting both regional domestic and foreign investment, which has resulted in increased access to new markets leading to higher competition and efficiency.
b. Formation of a COMESA Customs Union - the formation of a Customs Union that is to accelerate successful economic transformations and structural adjustment in the member States' economies to enable enterprises to become competitive both regionally and internationally. The result is that with a larger, competitive and a more efficient market on the one hand, and wider market inherently bound by fewer distortions and a common external trade policy instrument- the Common External Tariff (CET)-, the merits of the Customs Union can sufficiently encourage additional investments that would take advantage of a larger market and benefit from economies of scale, as new opportunities of employment are derived for the people of the region.
c. Formation of a COMESA Monetary Union- the objective of the formation of a COMESA monetary union programme is basically a medium term and achievable programme, designed to engender conditions of monetary stability, which is an essential catalyst for trade and economic growth, with efficient exchange rate and payments systems that can facilitate faster market integration of the region, The long-term goal is to eventually create a monetary Union with a single currency for the COMESA region.
Agriculture, fisheries, livestock and irrigation development
33. One set of programmes that has positively assisted the ordinary people in the region directly is COMESA’s programme on agriculture, fisheries and livestock development. These programmes are implemented under the framework of the Comprehensive Africa Agriculture Development Program (CAADP) and Climate Change Programme. The initiative is designed to address and foster inclusive trade in the region through fast tracking higher economic growth via agriculture-led development. It encompasses a detailed Agriculture Sector Development Strategy and Investment Plan (DSIP) which sets a roadmap to guide public action and investments in the region. Investments are packaged under four programmes representing the key areas of opportunity for the people and these include enhancing production and agricultural productivity; improving access to markets and value addition; creating an enabling environment; and institutional strengthening of the sector. Under this programme, additional programmes are conducted to facilitate food and agricultural marketing information Systems through training of data collection consultants and programme administrators. The Comprehensive Africa Agriculture Development Programme (CAADP) framework is designed to bring agriculture back to the pinnacle of economic development, while also contributing to the attainment of the Millennium Development Goals by 2015 - particularly Goal Number 1 of eliminating extreme hunger and poverty. COMESA has been mandated to coordinate and facilitate the implementation of the framework in its 19 Member States. To date, 16 countries have officially launched the CAADP implementation process, with 11 of these having signed their National CAADP Compacts. Six countries have designed their detailed and fully costed National Agriculture Investment Programmes. COMESA seeks to support the remaining countries to engage actively in the CAADP process.
34. In terms of improving the agricultural sector specifically, which is the backbone of member states in the region in the context of industrial and trade development, by 1997, it accounted for 24% of COMESA's gross domestic product (GDP), employed 70% of its labour force, and contributed up to 28% of the exports of the region[17]. The past three decades have, however, seen a slow rise in agricultural production in the COMESA region as population has tended to grow relatively faster. The decline in agricultural growth has been attributed to, among others, the slow rate at which new land is brought into production, inappropriate agricultural technology, environmental degradation, unfavourable land-use and land tenure policies, periodic drought, political instability in some parts of the region, and in many circumstances unfavourable external economic environments.
35. The twin challenges for COMESA are how to assure food security through sustainable increase in overall agricultural production, and how to stimulate a strong and dynamic agriculture-industry link. The core of COMESA's strategy for the agricultural sector is therefore to address these two challenges. COMESA already has an agricultural strategy which was developed through a broad-based consultative process and stresses the importance of co-operation and co-ordination of regional agricultural policy, food security, marketing, research and development (R&D), plant and animal disease and pest control, training, irrigation development, and exploitation of marine and forestry resources. This is because the COMESA Strategy recognizes the need for a holistic approach to advance agricultural progress that embraces the four "I s" of agricultural-development, namely: incentives, inputs, institutions and infrastructure.
36. With respect to fisheries, livestock and irrigation developments, fish and fishery products are important commodities in the region as sources of high quality protein, employment and income particularly in the rural areas. Some COMESA member countries rely to a very significant extent on their fishery resources for food security at home and income generation through exports. With improved air transport, the region has already witnessed substantial development of the fish export industry, providing good returns to a number of COMESA countries. The main objectives of the fisheries sub-sector therefore has been to increase fish production and promote intra- and extra-COMESA trade in fish and fish products. On livestock development, livestock sector in the COMESA sub-region plays a very important role in terms of providing livestock products like meat, milk, eggs, wool, hides, skins, manure and traction. The livestock share of agricultural output is reasonably high in some COMESA Member States ranging from 3% to 45%. The potential for increasing the productivity of the livestock sector within the COMESA sub-region is tremendous if efforts are directed to increasing feed quality and availability and the incidence of major livestock diseases and pests are controlled vigorously.
37. As to the development of irrigation systems, in the past three decades, food production in the COMESA sub-region has grown at about 1.4 % per year on average, while population growth averaged 3 percent, thus creating a significant food deficit that is unsustainable. Increasing demand for food, coupled with population pressure on arable land, worsened environmental degradation practices and in some cases, led to desertification. It is for this reason that it is now widely acknowledged that irrigation has an important role to play in expanding food and agricultural production and thus close the food deficit gap in the medium term.
Investment development, and Industrial and Private Sector Support
38. The focus of the investment development momentum of COMESA has been on the critical sectors of industry, agriculture, livestock, fisheries, and irrigation. In the services sector, the focus has been on financial inter-mediation, insurance, tourism, human resource and other social infrastructure developments. The strategy for programme implementation has therefore involved the identification and co-ordination of investment opportunities in all these sectors, promotion of higher productivity in agriculture and industry through training and collaborating programs, development of a suitable investment regimes, direct support to businesses through market development programs, and to a good extent, programs to mainstream gender in every aspect of industrial development.
39. Under the industrial and private sector development pillar of COMESA, industrial and private sector support programmes are important initiatives being undertaken and aimed at enhancing the expansion of intra-COMESA trade and industrial production. In the short to medium term, the COMESA strategy has been to emphasize the following:
a. Development of capacities in standardization, quality, metrology and testing, being done through development of National Standards Bureau, harmonization of certification of import/export practices based on ISO/ARSO certifications, accreditation of national standards bureaus, and to establishment of an operational information centre on standards, quality and metrology testing (SQMT) in each member State.
b. Development of a robust network of databases which are regularly updated in order to enhance the flow of information between the countries. The main COMESA network database is the COMESA Statistics Databas commonly reffred to as COMSTAT. COMESA also co-ordinates its data sourcing activities with other established databases such as the United Nation’s COMTRADE and to some extent with FAO.
c. Promotion of a level investment climate through reforms of private sector policies and the regulatory environment as wee as the establishment and strengthening of private sector networks and linkages through support to related COMESA organizations.
40. On industrialization in particular, it remains the driving force in COMESA’s development process, and since independence, many governments in Africa have taken industry as the main vehicle for diversifying their economies, generating jobs and reducing dependence on primary production and exports. Unfortunately, the share of industry in GDP for Africa has declined over the years, consistent with the decline in per capita income. As expected, the liberalized policies initially led to a contraction of manufacturing output, particularly in respect of the originally protected manufacturing sub-sector. Nevertheless, the key strategies for developing a stronger, balanced and competitive industrial base in the COMESA have been reformed to include the following: promotion of industrial co-operation so as to facilitate technology transfer and the exploitation of complementarities based on the principles of market sharing and resource pooling; capacity building in entrepreneurial, business management and other technical skills targeted at micro, small and medium enterprises (MSMEs); policy reforms aimed at supporting MSMEs and providing a more level playing field; and the implementation of programmes that promote balanced industrial growth as a way of narrowing disparities in industrial development.
41. A dedicated regional investment agency has been established to assist with the promotion of COMESA as an investment destination while private sector support, including programs to mainstream gender considerations in certain industrial activities are implemented. Under this arrangement and the COMESA industry and private sector development pillar, COMESA has supported the development of SMEs under specific industrial cluster programmes to increase productivity (particularly in the leather and leather products value chains and market linkages), while the COMESA Business Council (CBC) has advanced support to private sector associations throughout the region by providing capacity building and training opportunities on market analysis in order to develop their positions and policy proposals to influence overall trade policy.
Tourism development
42. Tourism is probably one of the fastest growing industries in the world today. Globally, tourism has become the icon of resource generation of many economies and a prominent foreign exchange earner. The industry has a potential for growth in the COMESA region, underpinned by the region’s vast wildlife and natural endowments. One of the strategies of COMESA has therefore been to promote the industry and to review its policy to attract potential investors into the industry. Furthermore, the vitality of the tourism sector places it in a vantage position to establish formal links with other sectors including transport and communication and the labour services industry, which together are relevant to the population in terms of job opportunities they are able to offer the people of the region. That is why COMESA Member States have been actively pursuing a common code of ethics for private and public tour and travel operators, to standardize hotel classification, and harmonize the professional standards of agents in the tourism and travel industry within the common regional market.
Science, technology and innovation (STI)
43. Science and technology has been advocated as a powerful force for igniting economic and social change. It is especially a critical ingredient for productivity growth and competitiveness of economic enterprises in the COMESA sub-region. In this regard, the COMESA region has lately embarked on a programme for fostering STI in the region through investments and Research and Development (R&D) in the region. This is a new dimension of focus for COMESA which has hitherto been miniscule in the Sub-Saharan region since sub-Saharan Africa's investment in R&D has averaged only 0.3% of GNP (compared to 2.2% for developed countries). With this strategy in full gear, it is expected that the COMESA region’s policy environment will embrace STI and strengthen the interface between science, industry and governments. The vision is to create an environment that fosters a dynamic, self-reinforcing relationship between the demand and supply of S&T knowledge and products, and their financing. It is hoped that STI will eventually be fully embedded into the delivery of all COMESA programmes under a comprehensive framework of policy. In this regard, STI should become enshrined in the region’s education policies through investments in this area and increased use and applications of information and communication technologies.
Infrastructure and energy development, and the environment
44. COMESA’s attainment of the long-term growth and development, as well as the mission of a fully integrated regional economic space where goods and services, and production factors can move will depend substantially on the infrastructural capacity of the region. Infrastructural weaknesses and inadequacies often pose the single most challenging factor of supply-side constraints to the processes of economic integration, inclusive growth and overall economic development.
45. Unfortunately, the current inter-state infrastructure in the COMESA region, particularly in respect of transport and communication, is at best inadequate to support rapid integration as envisaged in the COMESA Treaty. In recognition of this reality, transport and communication infrastructure requirements in the region have tended to feature prominently among priority programmes of COMESA. The Infrastructure Development programmes are intended to contribute to the efficient movement of people, goods and services alongside COMESA’s strategic areas of emphasis on the development and implementation of transit traffic facilitation programmes; identification and co-ordination of regional investments in transport, communications the energy sector; and the promotion and coordination of institutional and policy reforms in transport, telecommunication, postal, energy and environment sectors.
46. Regarding information and communication facilities, a programme on telecommunication connectivity, information and communication technology harmonization, and metrology and shipping services has been launched under COMESA. The achievement of a common regulatory regime to govern telecommunication connectivity is essential for regional integration objectives to be achieved. On information and communication technology, most of the challenges facing COMESA’s inter-relations with member states may be addressed significantly if the intended liberal economic regime in the COMESA region is expected to function smoothly and allow computerized data on trade and financial transactions to flow without undue inhibitions. As to metrology services, the programme is necessary for transport facilitation and for forward planning. The COMESA program on Shipping Services which has already been developed and agreed to is also expected to streamline policy co-ordination, ratification of maritime conventions and provision of comprehensive information on shipping matters to the COMESA region.
47. On energy, the production, distribution and utilization of energy in the COMESA region is far from being uniform. This difference in the supply and demand for power is partly to blame for the disparities seen in factor costs across the region. The main focus of the COMESA energy strategy is to pursue the joint development and pooling of energy resources with the objective of optimize intra-COMESA production and trade in commercial energy products. In this respect, the emphasis should be on joint exploration, exploitation and conversion of the energy resources of the sub-region such as wood-fuel, fossil, oil, hydropower, coal, geothermal, biomass and solar energy. The potential for the exploitation of these resources is enormous because over 170 billion cubic metres of natural gas; 200 billion metric tonnes of crude oil; 60 billion tonnes of coal; and 106,000 MW of hydropower potential are endowed in the region.
48. Thus, the COMESA energy strategy should aim to conserve and economize on energy use through the employment of technological innovations that consume less energy to function. The single largest user of petroleum-based energy is the transport sector which, in most countries, consumes over half of all oil consumed. Road transport consumes the highest proportion in the transport sector. This is followed by rail and air transport. Electrification of high traffic density rail sections can help to reduce the consumption of imported petroleum products since the region produces hydroelectricity. The upgrading or diversion of goods traffic from road to rail and water may also provide cost savings and therefore minimize the cost of doing business and of products.
Climate change
49. Regarding the environment, COMESA Member States believe that the essential parameter of development in the region will eventually depend on how the environment is managed. That is why the COMESA Secretariat has taken the environment programme seriously, with a focus on coordinating a joint action programme on trans-boundary environmental and conservation issues based on mutually agreed policies. The key areas of environmental management are therefore to prevent, arrest and reverse the effects of deforestation, erosion, deterioration of coastal waters, declining bio-diversity and loss of general diversity, polluted soil, water and air. COMESA is now working hard to develop a common environmental management policy to preserve the sub-region's ecosystems, and this endeavour has helped to forge a common stand to prevent incidences of third countries dumping toxic and undesirable waste in the region.
The COMESA cross-border trade initiative
50. This is another of COMESA’s trade facilitation and to some extent a programme designed to address some ominous supply side constraints that inhibit the free flow of goods and services within the region, especially for individuals and small scale traders who are placed to conduct trade across borders or indeed who live in the vicinity of member state borders. The programme is designed to those individuals, small scale firms and traders in the region to facilitate the realization of the broader objectives of the organization in ensuring that they enjoy the benefits of COMESA trade preferences. So far seven (7) of the nineteen (19) Member States of COMESA are now implementing the Simplified Trade Regime (STR) at all major border stations with support of 22 Trade Information Desks (TID). The Member States have agreed to review their STR value threshold from $500 to $1000 and reduce processing fees to under $1 and abolish the certificate of origin for goods traded under this arrangement.
COMESA programs for poverty reduction in line with Millennium Development Goals
51. One of the long term objectives of COMESA is to attain sustainable growth and development of the Member States by promoting a more balanced and harmonious development of its production and marketing structures with the aim of ensuring that poverty in the population is reduced and a cross-section of the population realizes improved quality of living standards. Consistent with this goal, the region already has a number of millennium development villages. As a matter of fact, by 2009, six out of the 13 millennium villages of the world were located in the COMESA region. This put COMESA in a position of advantage, because the region could use the existing villages, expand them and introduce new ones, to achieve the vision and objectives of COMESA of improving the living standards of the people of the region. Therefore the Millennium project, under which the villages are established, in collaboration with the governments, has provided key interventions such as in the provision of schools, clinics, seeds, new products, marketing information, and transport facilities; which assist to achieve poverty reduction goals in line with the vision of COMESA and MDG goals.
COMESA agenda ahead for inclusive growth
52. In view of the above lessons and achievements, a few challenges remain for the COMESA region to address remaining constraints- whether in form of policies or practical necessities- to move COMESA’s regional trade integration forward for the purpose of propelling the region’s economic and inclusive growth, and long term development. This means that for the period ahead, certain action programmes may need to be re-emphasized and redirected to address the current urge towards inclusive growth for all in the region. The following are just a few suggested directions towards meeting this goal.
53. As implied in the literature, the COMESA region should consider implementing further structural transformation to ensure sustainable and inclusive growth. This will require measures to accelerate the path of growth through programmes of income generation and job creation, diversification of sources of growth, prioritization of people centred growth, targetting the poor and the vulnerable and promoting decent jobs under programmes of rural development, and investment that helps to reduce poverty and inequality. The structural reforms should support the growth of agriculture and sustain food security of the people through improved food production, availability, accessibility, agricultural modernization and linkages with industrial activities, integration of small farm holders to play a role in sustaining and improving agri-business value chains, and improving quality of institutions that provide information exchange avenues on agriculture and food security.
54. In order to advance the gains from structural transformation programmes, programmes of human capacity development should be redesigned to deliver quality access to resources and social services in order to mitigate the adverse effects of extreme poverty among vulnerable groups that are susceptible to extreme poverty including the ederly, people with disabilities, a cross section of the rural population and displaced persons .. In this context, the programmes should be designed to provide education and human capacity development opportunities for the poor through prioritized provision of access to quality primary, secondary, technical and vocational education.
55. Universal access to basic healthcare and the prioritisation of gender equality and women empowerment schemes must be incorporated into the programmes in line with international MDG goals. Additionally, and in line with the continental plan for addressing population pressures and the growing youth community in the region, enhanced programmes for economic transformation should take account of the need to strengthen entrepreneurial capacities and opportunities for the youth as well as to ensure the availability and access to decent and affordable housing in both rural and urban areas.
56. Another important dimension is for the COMESA region to embark on a new strategy of building a more versatile system of sourcing required finances and building partnerships that can assist some of the strategic programmes for inclusive growth. The programmes can take the form of initiating intensive sourcing of overseas development financing and assistance to support programmes linked to COMESA inclusive growth strategy. Other alternative sources of financing of inclusive growth activities should also benefit domestic financing sources through internal borrowings from the public and the financial systems of member states. Other external financing sources could also be mobilized mainly via reinvestment of FDI proceeds, reduced costs of external transfers, and the exploration of new non-traditional sources of finance.
57. With regard to the building of new partnerships for inclusive growth, the region should also embark on heightened schemes of promoting public-private partnerships with emerging economies and other regional arrangements within Africa, as avenues for promoting access to global markets, improving the scope of global governance arrangements that have a direct bearing on growth programmes, promoting peace and security in the region, and instilling mechanisms for optimal macroeconomic management and participatory development continually refined and implemented.
58. Innovation, technology and research and development (R&D) become essential components for growth. Ideally, this is a strategy that should be built and supported alongside other development programmes. The scheme should be tied closely to a deliberate COMESA programme for enhancing the role that SMEs can play in the growth process. Despite the fact that nearly 99 percent of all firms in developing countries are SMEs, there is very limited evidence to show the impact of SMEs on overall economic growth. SMEs are present in all sectors, representing a wide variety of firm sizes, technology levels, degrees of formality etc. According to data from the World Bank, many of the countries in Sub-Saharan and therefore the COMESA region report a high number of SMEs. The number of SMEs in an economy is not necessarily related to the level of development even though their activities are distributed widely among a large number of more or less formal SMEs.
59. It is now widely accepted that SMEs are likely to drive economic growth when levels of income start to climb, and in this way, the role of SMEs in economic growth and development becomes highly important when a country is set on a track along a development path based on sustained and persistent economic growth wherein a wider section of the population participates and to contributes to the process of growth. Coupled with a robust strategy of addressing the incidence of informality in the economy, the role of SMEs in fostering sustained growth can become extremely crucial for the COMESA region if long term regional and inclusive growth objectives can be attained.
Way forward and recommendations
Way forward for COMESA
60. The way forward for the COMESA region should be to consolidate its current programmes that are consistent with the aims of achieving overall growth in an inclusive way. The march towards attaining appropriate growth rates should encompass the improvement of the standards of living for the wider cross section of the COMESA population, without leaving behind the most vulnerable and extremely poor sections of society. In order to achieve this ideal, the region may have to rethink and re-strategize in a manner as to allocate additional resources to more amenable programmes that can deliver sustainable inclusive growth across the board. In undertaking such new and additive, the benefits of related programmes must be seen to accrue to the vast majority of the populations of the region in form of improved living standards, if extreme poverty and deprivation is to be eliminated in the long run.
61. Such a feat cannot be achieved without the support of all stakeholders, including those involved in the shaping of the framework of the implementation of a robust economic growth policy and post MDG development agenda programmes. In meeting COMESA MDG objectives, the region already has already a number of millennium development villages, and the vision ahead should be to build and span out many more of such model villages. However, in doing so, COMESA will need to work with other partners who share the MDG ideals so that related programmes are adequately supported.
Recommendations
62. This paper recommends the following work programme:
a. A comprehensive plan for the redistribution of Member States’ national public expenditures and social protections should be developed in order to cushion the most poor and vulnerable from extreme poverty. The plan should include a component on human capital and capacity development, and job creation to help strengthen capabilities of potential employees in the labour market. In this way, the programme can address higher education needs of society;
b. Broad-based sectoral growth programmes, including the introduction of appropriate rural infrastructure and agricultural technologies be set up to benefit the poor directly.This is because the majority of the population in the region lives on agriculture and rural areas. Such programmes should incorporate opportunities for accessing markets for the products of the rural communities.
c. The COMESA region should undertake to assist Member States to develop country strategies on growth within their national trade policies that explicitly bind in considerations of inclusive growth. This may entail undertaking additional reforms in order to create enabling environments to help span production and business activities and investment especially through science, technology and innovation attuned to inclusive growth objectives.
d. In order for COMESA programmes to deliver on the all inclusive growth objective, the region has to build strong partnerships to support the efforts. These partnerships can be with private sector big business and with international development partners that can support and fund inclusive growth programmes. The programmes should focus on programmes of technological transformation and research; and human capacity development; attraction of investments from big business corporations to provide jobs and other opportunities for citizens of the region;
e. Specifically, consolidating existing ongoing programmes for SME development in the region is essential.
f. Other programmes that foster investments in climate change adaptation, reduction of deforestation, desertification and adverse pollution of the environment, improvement of land management systems and promotion of the utility of new resources will be essential for transformation to happen. The programmes should link up with the implementation of comprehensive industrialisation programme that espouses value addition through private sector development, improvement of distribution and reinvestment options for extractive industries, and an intensive programme devoted to the transformation of the informal sector into a formal market economy.
Partnerships
63. The above recommendations can be achieved faster with partners in development. Accordingly, COMESA should immediately harness partnerships that can credibly support, guide, facilitate and fund inclusive growth programmes. The following international organizations can be approached for partnerships with COMESA: The UK’s DfID, Japan, Sweden, Finland, EU, United Nations Development Programme (UNDP), the African Development Bank (AfDB), the World Bank, World Trade Organisation, the African Economic Research Consortium (AERC), the UN Economic Commission for Africa (ECA), IDRC, the Japan External Trade Organization (JETRO), and other suitable partners that can come on board. The roles of the partners can be defined as follows:
a. In respect to the development of country strategy papers on trade policy, partners can be requested to assist and finance the development of country strategy papers that define trade policies that are consistent with addressing remaining constraints to trade and more importantly that incorporate the vision of achieving inclusive growth for all peoples of the region and particularly the creation of jobs for the vulnerable;
b. In the effort to meeting inclusive participation in growth and development as well as achieving MDG goals within the COMESA region, the partners should be encouraged to assist the region financially and to provide technical assistance where appropriate for the building and modernizing MSMEs in the region. The assistance and development of SMEs within COMESA has now become one of the priority areas for COMESA’s advancement of the region as guided by the COMESA Council of Ministers. In this regard, collaboration with various international organizations in promoting inclusive growth programmes, including policy formulation, development of MSMEs and sustainable development generally is crucial;
64. Millennium villages are located in only a few of COMESA Member States. The role of the partners will therefore be to work with COMESA Secretariat and the region in order to expand the presence of these millennium villages to more COMESA Member States. In the course of this assistance and joint effort, focus should be directed to improving the productivity and efficiency of the villages so that they play a significant role in meeting the MDG goals.
Illustrative Country Strategy Paper (Scheme)
65. A national or country strategy paper (or regional for that matter) is one which builds in trade and its policies as one of the core instruments for addressing economic growth considerations, including the concept of inclusiveness. The following are the elements that fit in the scope of a national strategy paper.
i. A National Trade Policy
Trade policy is one of the instruments that can be used to reduce poverty among the population over a medium and long term period. However, trade performance is only one of the indicators that determine trends in poverty levels. A vibrant trade sector should impart positively on the health of the economy provided it is able to reallocate/redistribute incomes in all production units in a country. Further, trade policy can facilitate people to exploit their human productive potential. In cases where reforms are required, trade policy reforms could initially trigger some economic losses, but such losses are often transitory and temporary with some adverse implication for poverty reduction programmes. In such circumstances, the formulation and use of complementary policies are necessary because they can be implemented along with trade policies which are undergoing transformation as well. Basically, they provide relief from adjustment strains, while concurrently supporting the reform process. It is in this sense that trade policy plays a role in any economic reform that is intended to deliver growth and development as well as poverty reduction.
ii. A mission statement for an overall policy objective
The country strategy should have a concise mission statement of the policy to be developed, which could perhaps target the development and growth of the private sector as a vehicle for improving competitiveness and therefore to be supporting its production sectors to trade domestically and externally in order to create wealth, jobs opportunities and to enhance welfare.
iii. Guiding Principles
The design of a National Trade Policy and Strategy has to be guided by a set of principles and objectives which could include the following: development of both domestic and international trade; creation of opportunities for equal participation in trade through entrepreneurial development; the socially and economically disadvantaged groups in society are prioritized in the plan; provision of an enabling environment with a view to developing and nurturing a private sector that is capable of competing at global levels; etc.
iv. Priorities of the National Trade Policy
In implementing the National Trade Policy, the authorities can focus on a number of priorities, including, say, improving competitiveness; facilitating the free and smooth flow of goods and services; strengthening trade institutions; securing and maintaining market access; developing capacities; etc.
v. Requirements for Implementation of the National Trade Policy
In order to achieve the vision and policy objective of this Policy, the national authorities should comply with the following, among others:
i. Implement the re-organization and reform of the focal or coordinating Ministry, and possibly other organs whose activities have substantially much to do with trade and its implementation.
ii. Allocate adequate resources (both financial and/or human) to facilitate trade development activities right from the grass root level.
iii. Allocate resources for participation in activities that are aimed at securing improved and predictable market access opportunities for Uganda’s products and services.
iv. Develop and fund a Trade Sector Development Plan to guide the implementation and monitoring of the National Trade Policy.
v. Review and strengthen commercial and/or trade laws, as well as complementary laws and policies.
vi. Formulate and implement policies and strategies that are complementary to trade policy.
vii. Develop a Market Information System to facilitate the collection, analysis and dissemination of trade information.
viii. Institutionalize and strengthen the Public-Private Sector Partnership in the formulation and implementation of the trade policy and trade development strategies and programmes.
ix. Clarify and consolidate the relationship between the productive sectors on one hand and the trade sector on the other.
x. Work with the private sector to strengthen private sector apex associations.
vi. Specific Policy Interventions
To meet the principles of the trade policy and achieve the goals and objectives , the authorities, under the agreed trade policies, can only undertake specific policy interventions which are well guided. A monitoring and evaluation framework should be enabled to ensure coherence between the planning and implementation of the national trade policy.
vii. Domestic Trade
Development of the domestic trade policies should be undertaken after thorough consultations; the identification and exploitation of policy synergies and complementarities; ensurance that goods and services in the domestic market meet the required standards; using domestic trade as a spring board for effective participation in international trade; nurturing the private sector; and ensuring that all national policies and practices are consistent with requirements of the policy.
viii. International Trade
The policy should assist the growth in international trade using a vibrant domestic production and trade sector as a springboard. The overriding objectives of the authorities are to ensure effective integration of the economy into the regional economy and the multilateral trade system, the enhancement of national capacities to take advantage, while advising on how to minimize adverse effects of globalization.
Government policy actions on the international trade should propel and complement domestic trade policies and use trade negotiations to build trading partnerships in order to attract investments and growth.
What is produced domestically can be competitively traded at international level; using trade negotiations to influence policies and practices of the country’s trading partners’ so that they are conducive to the development of Uganda; and adapting a country’s economy to the trade and trade-related policies and practices of the country’s trading partners.
ix. Implementation of the National Trade Policy
The implementation of a National Trade Policy should be the responsibility of the appropriate coordinating ministry and ministry in-charge of trade. A National Trade Policy Implementation Plan should also be developed to guide implementation of the trade policy, while regular interactions are maintained with think tanks, academia, senior civil servants and the civil society on how best to develop and use a trade policy.
ANNEX VIII
Proposed Menu of RISM Indicators
List of Revised RISM Indicators for the Performance Assessment Framework
| |
|Priority Area VI: Institutional Development |
|Intervention Area |Expected Outcome |Indicator |
|Sustainable Monitoring and |National mechanism for drafting, monitoring and |(1) National Inter-Ministerial Coordinating Committees (NIMCC’s) |
|Reporting Mechanisms at |reporting on implementation of commitments |(a) officially constituted and (b) operational in accordance with |
|National Level |operational by 2015 |adopted COMESA/EAC/Tripartite Terms of Reference (TOR) (NIMCC) |
| |National statistical systems harmonized and |(2) Regionally agreed harmonized statistical clusters (HSC) |
| |functional by 2015 |domesticated |
| |
|Priority Area I: Removing Barriers to Factor Mobility |
|Intervention Area |Expected Outcome |Indicator |
|Consolidate the internal |Member States not yet in the COMESA FTA join the FTA|(3) (a) Establishment and (b) continued implementation of the |
|market (Free Trade Area (FTA))|by 2015 |COMESA Free Trade Area (FTA) |
| |Member States in the FTA remain in the FTA without | |
| |any policy reversals (i.e., without imposition of | |
| |any new taxes or any increase in existing ones on | |
| |internal market trade after joining the FTA). | |
| |Trade facilitation steps and measures to eliminate |(4) 100% of Non-Tariff Barriers (NTBs) reported on the Tripartite |
| |barriers to trade (Standards, SPS, NTBs, etc) |Online NTBs Monitoring and Elimination System against a Member |
| |undertaken by Member States by 2012 |State in a given year are fully resolved by the Member State in |
| | |the given year (NTBs) |
| | |(5) Number of COMESA and/or EAC Harmonized Standards adopted by |
| | |each Member State per year (COMESA /EAC Standards) |
|Remove Barriers to Trade and |Institutional and policy barriers to trade and |(6) Simplified Trade Regime implemented through establishment of |
|Business |business developed |Trade Information Desk Officers at relevant border posts |
|Operationalize the Custom |Customs Union provisions adopted by Member States by|(7)(a) Migration to the COMESA CTN by Member States (CTN) |
|Union |2015 | |
| | |(7)(b) Member State adopts the COMESA CET (CET) |
| | |(7)(c) Customs Management Regulations Domesticated (CMR) |
|Trade in Service |Finalized schedule of commitments in the priority |(8) (a) Draft final schedule of commitments in (up to) 4 priority |
| |sectors presented by Member States by 2015 |trade-in-services are submitted to COMESA; (b) Draft final |
| | |schedule of commitments in (up to) 3 additional priority |
| | |trade-in-services are submitted to COMESA (TIS-Schedule) |
| |Trade in services commitments implemented/ |(8)(c) Schedule of commitments in at least one priority sector – |
| |domesticated by Member States by 2015 |where all negotiating Member States have reach agreement – |
| | |gazetted at the national level by Member States [[indicator to be |
| | |further reviewed in line with the tenets of the agreed negotiation|
| | |process]]. |
|Launch of the Common Market |Council Regulations on Free Movement of goods, |(9) Protocol on the Gradual Relaxation and Eventual Elimination of|
| |Services, Labour, Persons and Capital and |Visa ratified and implemented (Visa elimination) |
| |Recognition of Right of Residence and Establishment | |
| |implemented by Member States by 2015 | |
| | |(10) Signing and ratification of the Protocol on Free Movement of |
| | |goods, Services, Labour, Persons and Capital (Free movement) |
| |
|Priority Area II: Building Productive Capacity for Global Competitiveness |
|Intervention Area |Expected Outcome |Indicator |
|Common Competition Policy |Common Competition Regulations domesticated by |(11) COMESA Competition Regulations domesticated (Competition) |
| |Member States by 2015 | |
|Foreign Direct Investment, |Common Investment Area Agreement or Protocol singed,|(12) COMESA Common Investment Area (CCIA) Agreement is signed and |
|Cross-Border Investment and |ratified and domesticated by Member States by 2015 |ratified or EAC Investment protocol signed (CCIA/EAC(1)) |
|Domestic Investments | | |
| | |(13) COMESA Common Investment Area Agreement or Regulation is |
| | |domesticated or EAC Investment protocol domesticated (CCIA/EAC(2))|
| |Double Taxation Model applied by Member States by |(14) Double Taxation Agreements (DTAs) negotiated, signed and |
| |2015 |ratified among Member States |
| |Investment climate improved and cost of doing |(15) Implementation of the 2010 Roadmap on national Steering |
| |business reduced by Member States by 2015 |Committee/ Commission creation, a national policy and |
| | |institutional reforms roadmap formulation, and appropriate law |
| | |formulation, for improving business environment in the COMESA |
| | |region |
| |
|Priority Area III: Addressing Supply Side Constraints Related to Infrastructure |
|Intervention Area |Expected Outcome |Indicator |
|Transport Facilitation |Implementation of the Yamoussoukro decision (YD) |(16) Air transport liberalization: Member State’s annual records |
|Instrument |-Air Transport Liberalisation programme in line with|on the granting of 1st, 2nd, 3rd, 4thand 5th Freedoms |
| |COMESA Legal Notice no.2 of 1999, by Member States |(Air-Trans-Lib) |
| |by 2015 | |
| |Transit Transport Facilitation Instruments |(17) COMESA Virtual Trade Facilitation System (CVTFS) implemented |
| |implemented by Member States by 2015 |through establishment of legal instruments and establishment of |
| | |CVTFS Monitoring Control Centres (MCCs) |
| | |(18) COMESA Carrier License implemented (Carrier license) |
| | |(19) COMESA Yellow card implemented (Yellow Card)… |
|Energy |Harmonized transport, ICT and energy regulatory |(20) Adoption of the COMESA Harmonized Regional Energy Policy |
| |frameworks established and implemented by Member |(HREP) by Member States (HREP) |
| |States by 2015 | |
|ICT Infrastructure | |(21) Adoption of the COMESA policy and legislation on ICT |
| | |infrastructure (ICT) |
| | |(22) COMESA Cyber Security Policy and Model Bill implemented |
ANNEX IX
LIST OF PARTICIPANTS
BURUNDI
Mr. Melchior Wagara, First Deputy Governor, Central Bank of the Republic of Burundi, BP 705 Bujumbura, Email:wagaramely@yahoo.fr
Mr. Audace Niyonzima, Director of Research and Statistics, Central Bank of the Republic of Burundi, BP 705 Bujumbura – Burundi; Tel +257 22 204015 / +257 79970126; Fax +257 22 22 3128; Email aniyonzima@yahoo.fr
DJIBOUTI
M. Malik Mahomed Garad, Chief du Departement de la Supervision, Banque Centrale de Djibout, BP – 2118 Djibout; Tel +253 21 31 20 12 / +253 77 827 230; Fax +253 21 35 12 09; Email Malik.garad@banque-centrale.dj
DR CONGO
Mr. Deogratias Mutombo Mwana Nyembo, Banque Centrale Du Congo, Boulevard Tshatshi, V Kinshasa/60Nbe; Tel +227 98 444 444 Email:
Mirindi Alexandre, Charge d’Affaires, DRC Embassy, Lusaka and Lilongwe. Tel +260 97585 2896
Ms. Ilunga Kabuya Phanie, Advisor, Banque Centrale Du Congo; Tel +243 81 504 9083; Email k.ilunga@bcc.cd/ iphanie@yahoo.fr
Ms. Pungu Luamba, Advisor, Banque Centrale Du Congo, Boulevard Tshatshi, V Kinshasa/60Nbe; Tel +227 98 444 444 / +243 822 708 376; Email r.pungu@bcc.cd
Ms. Molongya Sekila Taty, Economist, Banque Centrale of Congo, DRC; Tel +243 998 436 233; Email molongya@bcc.cd/ msekilataty@yahoo.fr
Mr. Tshimanga Mulomba, Advisor, Banque Centrale of Congo, DRC, Tel +243 975 656565; Email appollotshimanga@yahoo.fr
EGYPT
Mr. Tarek El-Kholy, 1St Deputy Governor, Central Bank of Egypt, P.O. Box 54, El Gamhoria Street, Central Bank Building; Email:
Mr Yousry M. Abd El Rahaman, Deputy General Manager, Central Bank of Egypt, P.O. Box 54, El Gamhoria Street, Central Bank Building; Tel +2 0 1001256654; Email yousry_abdelrahman@.
KENYA
Musa Kathanje, Deputy Director, National Treasury, Box 30007; Tel +254 722 823017; Email musa.kathanje@treasury.go.ke
Dr Haron Sirima, Deputy Governor, Central Bank of Kenya, P.O. Box 60000-00200; Tel +254 722 759967; Email:
Mr. Daniel K.A. Tallam, Assistant Director, Central Bank of Kenya, P.O. Box 60000-00200, NAIROBI, Kenya; TEL +254 (20) 286 0000; Fax +254 (20) 286 3236; Email talladk@centralbank.go.ke
Dr. Dulacha G. Barako, Assistant Director, Head, Academic Programmes, Kenya School of Monetary Studies, P. O. Box 65041-00618, Ruaraka – Kenya; Tel +254 20 8646321; Fax, +254 20 856 0430; Email barakodg@ksms.or.ke.
Ms June Ruhweza, Manager, National Payment Systems, Central Bank of Kenya, P.O. Box 60000NBI; Tel +254 20 2861109; Fax +254 20 340 192; Email rhuwezaj@centralbank.go.ke / june.ruhweza@
Mr. Esman M. Nyamongo, Economist, Central Bank of Kenya, P.O. Box 60000-00200, NAIROBI, Kenya; TEL +254 (20) 286 3211; Fax +254 (20) 286 0000; Email nyamongoem@centralbank.go.ke
Mr. Jaccob K. Chemase, Head Protocol, Governors Office, Central Bank of Kenya, P.O. Box 60000-00200; Tel +254 722 759967; Email Chemasejk@centralbank.go.ke.
Ms Maureen Teresa Odongo, Economist, Central Bank of Kenya, P.O. Box 60000-00200; Tel +254 (020) 286 000; Email odongomta@centralbank.go.ke
.
Abdi Mohamed Abdi, Personal Assistant to the Deputy Governor, Central Bank of Kenya, P.O. Box 60000-00200, NAIROBI, Kenya; Tel +254 472 8900019; Email abdiam@centralbank.go.ke
Ms Anastansia Wanjira Musindi, Admin Assistant, Kenya School of Monetary Studies; P.O. Box 47222-00100, NAIROBI; Tel 254 722 827560; Email musindiaw@ksms.or.ke
LIBYA
Dr. Mahomed Abusneina, Advisor Economic Advisor, Central Bank of Libya, Box 1103, Tripoli, LIBYA; Tel +218 21 4831 640; Fax +218 21 4831 641; Email abusneina_dr@
MADAGASCAR
Mrs. Razafimbelo Vonimanitra, Acting Governor, Central Bank of Madagascar, P.O. Box 550 Tananarive; Tel + 261 320 781 257; Fax +261 20 223 4532; Email sdg@bfm.mg
Ramarokoto Florence, Chief de Cabinet du Governor, Central Bank of Madagascar, P.O. Box 550, Tananarive; Tel +261 320 781 257; Fax +261 20 223 45532; Email sdg@bfm.mg
Andriamiharisoa Andre, Director of Research, Central Bank of Madagascar, P.O. Box 550 Tananarive; Tel +261 202 221751; Email A.ANDRIAMIHARISOA@bfm.mg
MALAWI
Hon. Dr. Maxwel Mkwezalamba, Minister of Finance; Box 30049; Tel +265 1 789 355; Fax +265 1 789 173.
Mr. Charles Chuka, Governor, Reserve Bank of Malawi, P.. Box 30063, Lilongwe; Tel: +265 1 774767, Email: cchuka@rbm.mw / Emamba@rbm.mw Mr. Richard Hara, Chief Executive Officer, Lilongwe City Council, Box 30396, Lilongwe 3; Tel +265 1 710 177; hararichard@yahoo.co.uk;
Mr. Ralph Tseka, Director of Research and Statistics, Reserve Bank of Malawi, P.O. Box 30063, Lilongwe; Tel +265 1 770 600; Email rtseka@rbm.mw
Mr. Francis Zhuwao, Director, Ministry of Finance, Box 30049, Tel +265 1 789 355; Fax +265 1 789 173; Email fzhuwao@.mw
Mr. George Jerome Kamba, Deputy Director, Min of Finance, Box 30049; Tel +265 888 307 819; FAX +265 1 789 173; Email kamba_george@
Mr. Grecium Kandio, Deputy Director (Revenue), Min of Finance, Box 30049, Lilongwe3; Tel +265 888 762 458; Email greciumk@
Mr. Mbane Ngwira, Acting Director, Governors Office, Reserve Bank of Malawi, P.O. Box 30063, Lilongwe3; Tel +265 1 770 600; Email mngwira@rbm.mw
Dr. Mark Lungu, Principle Economist, Reserve Bank of Malawi, Reserve Bank of Malawi, P.O. Box 30063, Lilongwe3; Tel +265 1 770 600/ +265 99 155 7965; Fax +265 1 770 593; Email mlungu@rbm.mw
Mrs. Angella Mjojo, Manager, Financial Stability; Tel +265 1 770 600; Email amjojo@rbm.mw
Mr. Osky Sichinga, Manager, NPS, Reserve Bank of Mlawi, Box 30063, Lilongwe 3; Email osichinga@rbm.mw
Mr. Golden Nyasulu, Min of Finance, Box 30049, Lilongwe 3; Email gnyasulu@.mw
Mr. Elijah Tiwonger Nyirenda, Min of Finance, Box 30049 Lilongwe3; Tel +265 999 478 578; Email etnyirenda@
Mr. Anwar Mussa, Min of Finance, Tel +265 999 224 877; Email amussa@.mw
Ms. Martha Chizimba, Chief Economist, Min of Finance; Box 30049, Lilongwe3; Tel +265 888 356 758; mchizimba@.mw
Mr Boyd Hamella, Min of Finance; Box 30041, Lilongwe 3; Tel +265 1 789 355 / +265 995 193 635; Email boydhamela@
Ms Suzgo Judith Luhanga, Principal Economist, Min of Finance, Box 30049, Lilongwe3; Tel +265 999 322 999; Email sluhanga@
Ms Yalewa Loraine Nyirenda, Econommist, Min of Finance, Box 30049, Lilongwe 3; Tel +265 999 403 131; Email yalenyirenda@yahoo.co.uk
Mrs. Agness Sentala, Legal Counsel, Reserve Bank of Malawi, P.O. Box 30063, Lilongwe 3; Tel +265 1 770 600; Email agsentala@rbm.mw
Ms. Kettie Musukwa, Chief Economist, Ministry of Finance, Box 30049, Lilongwe3; Tel +265 1789 355; Fax +265 1 789 173; Email kmusukwa@.mw.
Mr. Nations Msowoya, Assistant Director, Ministry of Finance, Box 30049, Lilongwe; Tel +265 888 334 553; Fax + 265 1 789 173; Email msowoyan@.mw
Mr. Daniel Jenya, Min of Finance, Box 30049; Tel +265 1 789 355; Fax +265 1 789 173; Email djenja@finance.go.mw
Mr. Moses Chirwa, Ministry of Finance; Tel +265 1 789 355; Fax +265 1 789 173; Email moseschirwa@.mw
Mr. Wyton Jombo; Economist, Reserve Bank of Malawi, P.O Box 30063; Tel +265 1 770 600; Email wjombo@rbm.mw
Ms. Kettie Musukwa, Chief Economist, Ministry of Finance, Box 30049, Lilongwe3; Tel +265 1789 355; Fax +265 1 789 173; Email kmusukwa@.mw.
Ms. Ethel Mamba, Administrative Assistant, Reserve Bank of Malawi, Tel +265 888 356 135; Email emamba@rbm.mw
Mrs. Mercy Nkhulawe Phiri, Administrative Assistant, Reserve Bank of Malawi; Tel: +265 999 988 383; Email mnkhulawe@rbm.mw
MAURITIUS
Mr. Yandraduth Googoolye, 1st Deputy Governor, Bank of Mauritius, Street William Newton Street, Port Louis, Mauritius; Tel +230 202 3826; Email
Mr. Audit Dooneshszngh, Chief – Policy Unit, Governors Office, Bank of Mauritius, Street William Newton Street, Port Louis, Mauritius; Tel +230 202 3826; Email Dooneshsingh. Audit@bom.mu
RWANDA
Dr. Monique Nsanzabaganwa, Deputy Governor, Central Bank of Rwanda, P.O. Box 531, Kigali; Email:
Mr. Gatera S. Jonathan, Director General- Operations, Central Bank of Rwanda, P.O. Box 531, KIGALI; Tel +250 788 303263; Fax +250 252 572 551; Email jgatara@bnr.mw
SEYCHELLES
Dr. Steve Fanny, Principal Secretary, Finance, Trade & Investment Ministry, Liberty House; Tel +248 478 2004; Email steve@
Ms Astride Maryann Tamatave, Senior Finance Analyst, Min of Finance, Trade and Investment, C/O Ministry of Finance, Liberty House; Tel +245 272 9186; Fax +248 432 2782; Email astride.tamatave@.sc
SUDAN
Mr. Mohamed Ahmed Bushra Badawi, Assistant Governor, Central Bank of Sudan, P.O. Box 313; Email:bushrabadawi@
Mr. Abdelrahman Mahomed Abdelrahman, Deputy Director, Central Bank of Sudan, P.O. Box 313; Tel +249 9 122 15807; Fax +249 183 78 1341; Email arahmanm40@
Mr. Mustafa Abdelgadir Dinar, Economist, Central Bank of Sudan, P.O. Box 313; Tel +249 912 24032; Fax +249 183 781341; Email mdinaar@
SWAZILAND
Mrs. Dumisile Magagula, Ministry of Finance, Mbabane
Dr. Bhadala T. Mamba, General Manager, Economic Policy, Research and Statistics, Central Bank of Swaziland, Box 546, Mbabane; Tel 268 2 408 2244; Fax +268 2 404 0038; Email Bhadalam@.sz
UGANDA
Hon. Fred Omach, Minister of State, Ministry of Finance, Kampala
Dr. Louis Kasekende, Deputy Governor, Bank of Uganda, P.O. Box 7120, Kampala
Mr. David Kalyango Lubawo, Executive Director, Finance, Bank of Uganda, P.O Box 7120, KAMPALA; Tel + 256 794 857 759; Email dkalyango@bou.or.ug
Dr. C. A. Abuka, Director, Financial Stability, Bank of Uganda, P.O. Box 7120, Kampala; Tel +256 752 344 078; Fax +256 414 258 063; Email cabuka@bou.or.ug
Mr. Jacob Opolot, Director Research, Bank of Uganda, Box 7120, KAMPALA; Tel +256 414 230 791; Fax +256 414 230 791; Email jopolot@bou.or.ug
ZAMBIA
Hon Keith A. Mukata, Deputy Minister of Finance, Box 50062, Zambia, Tel +260 211 253 388; Fax +260 211 253 388; Email kmukata@
Mr. Peter Banda, Director of Economics, Bank of Zambia, P.O. Box 30080, LUSAKA; Tel +260 977 787 245
Mr. Jacob Mkandawire, Executive Assistant – Deputy Governor’s Office Bank of Zambia, P.O. Box 30080, LUSAKA; Tel +260 974 634 332
Mr. Akapelwa Imwiko, Chief Economist, Min of Finance; Tel +260 977 494949; Email akimwiko@
Mr. John Kyolwe, Protocal Officer, Ministry of Finance, Box 50062, Lusaka; Tel +260 211 253 494 / +260 977 762 219; Email kyolwe@
ZIMBABWE
Mr. Willard Manungo, Permanent Secretary, Ministry of Finance, Box 7705, Harare; Tel +263 4 792 750; Email wlmanungo@
Mr. Cosmas Mbambe, Ministry of Finance, Harare
Mr. John Mafararikwa, Senior Division Chief, Reserve Bank of Zimbabwe; Tel +263 470 2636; Email jmafararikwa@
Mr. Willie Nakunyada, Chief Economist, Reserve Bank of Zimbabwe, 80 S. Machel Ave; Tel +263 4 70 3000; Email wnakunyada@rbz.co.zw
AFDB
Mr. Jian Zhang, Principal Macroeconomist, ONRT/EAST Africa Resources Center, Khushee Tower, Longnot Road, Upperhill, P.O. Box 4861-0020, Nairobi, Kenya; Tel +254 202 998280; Fax +254 202 712 938
Denwick Kamanga, Principle Governance Expert, AFDB, box 307321, Lilongwe; Tel +265 1 774 460; Email d.kamanga@
IMF
Mr. Geofrey Ostreicher, Resident Representant-Malawi P/BAG B354, Lilongwe 3 Malawi; Tel +265 9999 62549; Fax +265 1 770 702; Email goestreicher@
SADC
Mr. Thembi Langa, Senior PR Officer – Finance and Investment, SADC Secretariat, P/Bag 0095; Tel +267 395 1863; Fax +267 393 2848; Email tlanga@sadc.int
UNECA
Mr. Mzwanele G. Mfunwa, UNECA – Lusaka, Zambia, P.O Box 30647; Tel +260 228 502; Email mmfunwa@
COMESA CLEARING HOUSE
Mr. Mahmood Mansoor, Executive Secretary, COMESA Clearing House, P.O. Box 2940, Harare, Zimbabwe; Tel +263 4 495 189; Fax +263 4 498 487; Email mmansoor@
COMESA MONETARY INSTITUTE (CMI)
Mr. Ibrahim A. Zeidy, Director, COMESA Monetary Institute, Kenya School of Monetary Studies; Tel 6254 787 408269; Email izeidy@comesa.int
Mrs Monica Cherwon, Administrative Assistant, COMESA Monetary Institute, P.O. Box 65041 – 00618, NAIROBI; Tel +254 28 864 6207; Email monicakogo@
FEMCOM
Mrs. Katherine Ichoya, Director, FEMCOM, Zimbabwe House, Malawi Lilongwe; Email: kichoya@comesa.int
Ms Angela Mwape Mulenga, SME Cluster Development Expert, COMESA/FEMCOM, Zimbabwe House, Lilongwe; Emailamulenga@comesa.int
Dr. B. Tewolde, Cluster SME Development Expert, COMESA Secretariat, Zimbabwe House, Malawi Lilongwe; Email btewolde@Comesa.int
COMESA SECRETARIAT, P.O. Box 30051, Lusaka, Zambia
Mr. Sindiso Ngwenya, Secretary General, COMESA, P.O. Box 30051, Lusaka, Sngwenya@comesa.int
Dr. Francis Mangeni, Director, Trade, Customs and Monetary Affairs, P.O. Box 30051, LUSAKA; +260 96 37 38387; Email fmangeni@comesa.int
Mr. Dev Haman, Director Budget and Finance, Lusaka, Zambia; Tel +260 966 71 2191; Email: dhaman@comesa.int
Mr. Tasara Muzorori, Trade Expert, COMESA Secretariat, P.O. Box 30051, Lusaka; Email: Tmuzoroir@comesa.int
Fred Besa, COMESA Secretariat, P.O. Box 30051, Lusaka; Email: fbesa@comesa.int
Mr. Sandisiwe Ndlovu, Comesa; Tel +260 976 669 102; Email sandisiwendlovu@
Hope Situmbeko, COMAID Coordinator, COMESA; Emailhsitumbeko@comesa.int
Mr. Caesar Cheelo, Macroeconomist, COMESA; Tel +260 977 852 221; Email cchecho@comesa.int
Mr. Terence Saisha, Senior Procurement & Supplies Assistant, P.O. Box 30051, Lusaka; Tel +260 22 9725 / 32; Fax +260 – 225107; Email tsaisha@comesa.int
Ms. Mary Ndoti, COMESA Secretariat, P.O. Box 30051, Lusaka; Tel +260 211 2297 25/31; Fax +260 211 225 107; Email: mndoti@comesa.int
Ms Catherine Mwaba, Senior Bilingual Secretary, P.O. Box 30051, Lusaka 10101; Tel +260 0979 998429; Email cmwaba@comesa.int
INTERPRETERS/TRANSLATOR
Mr. John Kabala, Interpreter, 9 Watema Road, Kansenshi, Ndola; Tel +260 955 71 7898; Email jklkabala@
Mr. Tente Kashobwe, Interpreter (French / English), P.O. Box 36162, Lusaka; Email tentekashobwe@yahoo.int
Mr. Douglas Kapenda, Interpreter, Box 73001, Ndola Zambia; Tel +260 955 434791; Email kapenda.douglas@
Mr. Valentine Chiluka, Translator, P.O. Box 30948, Lusaka,; Tel +260 966 859 730; Email chihiluka@yahoo.fr
Mr. Crispin Kabembo Kapolwa, Translator, P.O. Box 30062, Lusaka, Zambia; Tel +260 366 725590; Email crispinkabembo@yahoo.co.uk
-----------------------
[1] This program would essentially incorporate MTFF and MTBF, if a Member State has formulated them
[2] Cf. paragraph I below, and the document on the implementation guidelines for ESP.
[3] The Growth Report, the World Bank, 2010.
[4] The Millennium Development Goals (MDGs) are eight international development goals that were officially adopted following the Millennium Summit of the United Nations in 2000. All 193 United Nations member states and at least 23 international organizations agreed to achieve these goals by the year 2015. Each of the goals has specific stated targets and dates for achieving them. The goals are: 1) Eradicating extreme poverty and hunger, 2) Achieving universal primary education, 3) Promoting gender equality and empowering women, 4) Reducing child mortality rates, 5) Improving maternal health, 6) Combating HIV/AIDS, malaria, and other diseases, 7) Ensuring environmental sustainability, and 8) Developing a global partnership for development.
[5] Growth that is essentially growth which can be identified with “inclusiveness” and “sustainability”.
[6] At this point, it must be clarified at the outset that the terms growth and development are fundamentally different in meaning and reference, although they are related. Basically, growth is a quantitative concept while development is both quantitative and qualitative.
[7] While GDP climbed by 10 and 20 percent in the Euro-area and the US respectively, GDP nearly doubled in Sub-Saharan Africa.
[8] Apart from a few countries like Kenya and South Africa, countries in Sub-Saharan Africa are not well integrated with international financial markets. As a consequence, the credit crisis was not as severe in terms of growth effects for the countries in Sub-Saharan Africa.
[9] In terms of the pattern of growth observed in the components of GDP, clearly, private investment picked up significantly beginning in early 1990s and helped to fuel long term economic growth. Yet, growth was also reflected in both public spending and private consumption. In other words, there was a broadly spread and balanced growth pattern during the last decade.
[10] Policy Plus: African Growth Performance 1960-2000, Chapter 1 of volume 1 (Benno J. Ndulu and Stephen A. O’Connell), 2001.
[11] Purchasing Power Parity (PPP of simply defined as the equivalent buying power in different currencies)-adjusted.
[12] The reason for using the two-stage approach was basically to allow the two stages to discipline the conduct of analysis and to inform each other in order to produce consistent, unified and comparable accounts of individual country experiences with growth.
[13] But it is clear from the evidence that this African growth “tragedy” (the term comes from William Easterly and Ross Levine (1997) and Artadi and Sala-i-Martin (2002) – is a staple of the cross-country growth literature, and one that easily matches its distant counterpart, the East Asian “miracle,” in its cumulative impact on thinking about economic growth.
[14] However, as it is often the case, identifying and pinning down the binding constraints will always require exhaustive and careful thinking. As a matter of fact, one of the criticisms of this kind of approach to growth and development planning, at least in the context of Africa, rests on the idea that it is often practically impossible to estimate shadow prices, very difficult to reject constraints as not binding, and the required analysis of growth and development is often focused on the short term, and therefore ignoring the necessity for the consideration of factors that are inextricably important to sustainable growth, such as human capital and employment productivity etc.
[15] In some cases of certain COMESA countries, these figures are much higher. Agriculture is also a major contributor - more than 50% - of raw materials for industrial activity in the region.
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