From: wsargeant@IGC.APC.ORG (Winslow L. Sargeant)
Newsgroups: soc.culture.african
Subject: IPS:ECOWAS, shortage of funds continues
Date: 29 Jul 92 15:23:53 GMT

/* Written 12:03 am  Jul 29, 1992 by newsdesk in cdp:ips.englibrary */
/* ---------- "ECOWAS: SHORTAGE OF FUNDS CONTINUES" ---------- */
Copyright Inter Press Service 1992, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Title: ECOWAS: SHORTAGE OF FUNDS CONTINUES TO HAMPER INTEGRATION


an inter press service feature

by peter da costa

dakar, jul 25 (ips) -- implementation of a series of measures
to speed up regional economic integration in west africa will
continue to be hamstrung by the perennial problem of a shortfall
of funds to the umbrella economic community of west african
states (ecowas).

ministers from the 16-member community meeting here friday
adopted a series of measures they believe will breathe new life
into ecowas's objective to create a solid foundation for
economic development in the sub-region, which remains africa's
poorest.

but in doing so they warned that unless member states pay
their dues, little can practically be achieved. insiders say
members owe some 20 million dollars to the secretariat's
operations -- a staggering three times its annual budget.

the ecowas fund, which provides capital for approved
community projects, is severely undercapitalised. the fund's
managing director, mahenta fall, says three countries are yet to
pay up fully to the first tranche of called-up capital, while
the second tranche is only 24.1 percent subscribed.

the community's compensation fund, set up to pay members who
suffer from deflection of trade caused by ongoing
liberalisation, is also short.

figures show that out the budget of some 4.5 million units
of account (about 6.3 million dollars), only 1.8 million units
of account (2.4 million dollars) have been paid up.

ecobank, a private regional investment bank in which ecowas
has a controlling share (10 percent), is said to be in serious
trouble after only four years in existence.

prospects for the bank's short-term profitability are
''doubtful'', fall admits in his annual report.

the bank's problems include ''inadequate capital, lack of
competence on the part of its management, lack of procedures,
waste of resources and loss of opportunities to make profit''.

since its formation in 1975, ecowas's effectiveness has been
plagued by financial incapacity, worsened by declining world
terms of trade, increasing inflation, structural adjustment and
a mounting sub-regional debt burden (currently estimated at 100
billion dollars). (more/ips)


ecowas: shortage (2)

ecowas heads of state due to meet here next week have the
power to act on defaulters, although few expect resolute action
to be taken since it may further cleave a community already
split along anglophone-francophone linguistic lines.

a resolution passed at the 1990 summit, sanctions against
non-payment include barring of nationals of blacklisted member
states from statutory appointments, sending home nationals of
non-payers employed by ecowas and suspension of the defaulting
sate.

the 1980s were a lost decade for ecowas with little movement
toward regional cooperation, a situation ecowas executive
secretary, abass bundu, told the ministers has to be changed if
the community is not to die an ignominious death.

in response to bundu's warning, the ministers have injected
new urgency into the community's trade liberalisation scheme,
which has remained largely unimplemented since its inception in
1990.

intended to change the fact that only five percent of
intra-regional trade is recorded, the scheme was due to
eliminate tariff and administrative barriers.

instead, it has remained at a virtual standstill, although by
mid-1990, some 90 indigenous products had been approved for
eligibility.

as well as increasing the number of tradeable products to
130, this year's meeting has fixed a flat rate of 25 percent
duty on all goods, erased old distinctions between high and low
priority items and set new targets for member states to achieve
optimum liberalisation by the year 2000.

the meeting also criticised national structural adjustment
(sap) policies adopted by most ecowas members as hindrances to
the very trade barriers liberalisation had sought to remove.

the ministers are now calling for an achievable, rather than
an overambitious, regional programme of development. they also
see the need for a mechanism to act as an interface between
national sap initiators, major donors and ecowas institutions.

financial crisis notwithstanding, the ministers also made a
principled stand against opening the fund to extra-community
sources of capital.

fall himself is quoted as saying allowing outside money into
funding ecowas projects will lead to a loss of sovereignty, a
concern many delegates share. (more/ips)


ecowas: shortage (3)

however cash-strapped, the fund is due to press ahead with
some of its planned projects. next week fall will sign an
agreement with senegal's finance minister for 3.5 million
dollars for a textile factory.

informed sources say the west african transcoastal highway --
one of two ambitious schemes to link the 16 member states -- has
been approved pending availability of funds.

ecowas also intends to upgrade the level of professionalism
in the day-to-day running of its abuja, nigeria-based
secretariat and the togo-housed fund.

an eminent persons group (epg) mandated two years ago to
draft a new ecowas treaty is due to present its report to
leaders next week.

well-informed sources say the epg, chaired by ecowas
co-founder and former nigerian president yakubu gowon, has been
conservative in its recommendations. ecowas leaders are said to
favour a more radical treaty review.

one area the epg will have made progress is the strengthening
of the treaty to make community decisions binding on member
states rather than just, as is now the case, ecowas
institutions.

when they meet monday the ecowas leaders will renew their
perennial political commitment to the organisation and promise
to implement summit decisions.

but until political rhetoric is superseded by concrete action
at the grassroots level of the ecowas citizen, the annual
gathering will continue to be little more than a dirge for the
economic oblivion of the sub-region and a post-mortem into the
reasons for its marginalisation. (end/ips/pdac/apc/92)
Newsgroups: soc.culture.african