or against a merger between two banks can be put forward. apart from taking these general principles into account when the desirability of a merger is discussed, the arguments, conditions and considerations specific to a possible merger are just as important. when any merger is proposed, one of the major concerns is that competitiveness of the sector could be diminished. free competition within the banking system will improve the efficient allocation of resources in the economy, thus enhancing society ’ s wealth and welfare. increased competition in the banking system may lead, for example, to undue risk taking and thus reduce stability in the banking system. on the other hand, measures taken to increase stability in the banking system through mergers may lead to reduced competition. when a merger would cause a large concentration in a market that is, or becomes, highly concentrated, we need to give special attention to the impact on competition. high levels of concentration in any banking system could result in relatively high prices for banking services. it is, however, difficult to compare prices before and after a merger in banking because of other factors such as differential central bank policy and inflationary expectations. the banking system ’ s contribution to the efficient allocation of resources in the economy is reflected by its managerial ability to control input costs ( labour, physical capital, deposits ) through the utilisation of the returns of scale, scope and efficiency. operating costs will eventually determine the optimal structure of the banking system in terms of the number of banks, the size of the banks, the number of branches of banks and possible mergers and acquisitions. competitive markets are our best assurance that consumers receive the highest quality products at the lowest possible prices. 5. recent developments causing banks to merge throughout the world, banking industries are undergoing a rapid and sometimes startling process of consolidation, spurred occasionally by hostile takeover bids, but, more often, by friendly mergers by institutions that were once fierce competitors. several reasons that drive banks to merge can be identified : firstly, banks are tussling with the same technology, delivery and customer - service issues that have become pressing for major international banks. banks are feeling forces of globalisation and technological change and must invest huge amounts in their own information technology systems. the electronic revolution also undermines the traditional role of banks as intermediaries between borrowers and savers, in the process reducing banks ’ profits. this, in turn, is forcing banks to cut costs more urgently, and a merger with another bank becomes an attractive option for a bank. advances in information technology also

. 9. africa the imf ’ s growth forecast for africa is a relatively high 3, 5 per cent for this year. but a wide dispersion of growth rates is expected, reflecting variations in the mix of commodity dependence, economic policy developments and other country - specific influences. for example mozambique is expected to grow by 8 per cent while the zimbabwean economy is forecast to contract by around 6 per cent. africa is expected to be affected most by developments in commodity prices. oil exporters such as algeria, angola, nigeria will be negatively affected by lower oil prices, although this will provide a cushion to oil importers. the view of the weo however is that the growth outlook for many african economies is expected to be held back by falling prices of almost all non - fuel commodities, especially coffee and cotton. the stronger the general global recovery, the quicker these commodity prices are expected to recover. however the problem is that a strong global recovery could result in oil price developments that swamp the positive impact on many of the commodities that african countries are dependent upon. the imf forecasts growth for south africa at 2, 3 per cent for 2002. just as the rest of africa will be affected by developments in commodity prices, so too will south africa. 10. conclusion in conclusion, the united states appears to be on the brink of a turnaround from what will have been a relatively short and mild recession. unfortunately other countries were not so fortunate, and their recoveries remain dependent on the strength and duration of the us recovery. from a south african perspective, this bodes well for a recovery in commodity prices, and therefore an improved export performance. however there is always the risk that the prophets of doom will be correct and that the recovery in the us and therefore in the rest of the world will be short - lived. what the current recession has highlighted is the increased dependence of the world on the health of the us economy. whereas there had been a view that the emergence of different trading blocs such as the eu and an asian bloc ( a tri - polar solution ) could reduce dependence on the us, trade and financial linkages have become even stronger, thereby increasing the degree of synchronicity. the recession has also highlighted the disproportionate burden placed on monetary policy to bring about the required real adjustments. this raises a question of the efficiency of the current international financial architecture that renders the whole world increasingly dependent on the state of the us economy. emerging markets are