Rethinking Bretton Woods | Fri, Dec 2, 2011
What role plays regional monetary cooperation in Africa’ trade and development ?
On November 21-23, in Yaounde, Cameroon, Center of Concern co-organized a seminar on the theme “Effective Monetary Cooperation to Support Trade and Development in Africa,” convening public officials from Cameroon and neighboring countries, intergovernmental organizations and civil society to address these important questions.
On November 21-23, 2011, the Center of Concern, the African Development Interchange Network and the Commonwealth Foundation, alongside SEATINI and the Kenyan Debt Relief Network, cosponsored “Effective Regional Monetary Co-operation to Support Trade and Development in Africa: Regional Monetary and Liquidity Arrangements.”
The workshop was held in Yaoundé, Cameroon, and convened officials from West and Central African country governments, intergovernmental organizations, civil society and academic representatives. Its objective was to build a platform for constructive engagement to raise awareness and build consensus on monetary policies and operational tools that could influence trade patterns and thus lead to financial resilience, growth and poverty reduction.
The context for the seminar was the situation of Africa’s trade, which had led to high rates of growth in the years preceding the financial crisis, but had not been accompanied by structural transformation and diversification and failed to translate into equitable human development.
The recent global financial crisis had affected African countries especially due to the lack of a diversified economic structure. This underscored the challenges of promoting the diversification of export products and markets. In this context, regional monetary cooperation mechanisms should be an undeniable component of a post-crisis financial architecture that was more sensitive to the trade issues faced by developing country economies.
Yet, the post-crisis reform agenda had largely failed to place emphasis on regional monetary cooperation.
Participants at the workshop reviewed a number of proposals of regional scope, and some proposals that the African Union is working on were noted as holding promise. This was the case for the African Monetary Fund and the African Central Bank, but the history of these initiatives also offered room for caution given the long time they were taking to yield results.
Other proposals were of a sub-regional scope, and the role of civil society participation to ensure that they would be oriented to serve the needs of people in the region was underscored as a crucial factor for success. In the case of the West Africa and Central Africa common currencies, the lack of autonomy to manage them as well as the fragmentation they introduced in two geographically close sub-regions was raised as a matter of strong concern to several participants.
The comparison with initiatives of other regions of the Global South, aided by the presence of experts from outside Africa, offered strong grounds for understanding where the experiences could be applied in Africa, while tailoring them to the local institutional and political characteristics.
In fact, African countries were ready, in the view of several participants, to undertake alternative approaches to financing development programs, such as pooling reserves under a Pan African institution.
It was obvious to several participants that without civil society mobilization to claim action by their leaders, the agenda of regional cooperation would hardly receive the priority it needs in order to come to fruition. Thus, one of the agreed commitments was to ensure continued lobbying and the education of constituencies.Outcome report (please check back soon).