Thorny Issues Worth Surmounting to Take The African Monetary Fund Off the Ground!
By Godlove BAINKONG, Cameroon Tribune, 10-04-2014
Move beyond the statutes. It is certainly a good improvement but given that other interwoven conditions need to be put in place to reap the fruits of a common monetary union for the continent, staying just with the statutes would be a loud sounding nothing. Governance issues and capitalisation of funds need to be settled.
Ratifying the statutes, settling governance and capitalisation issues still remain hanging.
As participants at the just-ended Abuja seventh joint African Union conference of Ministers of Economy and Finance and ECA Conference of African Ministers of Finance, Planning and Economic Development beat their chests for having at long last adopted the statutes of the African Monetary Fund, one thing remains.Move beyond the statutes. It is certainly a good improvement but given that other interwoven conditions need to be put in place to reap the fruits of a common monetary union for the continent, staying just with the statutes would be a loud sounding nothing. Governance issues and capitalisation of funds need to be settled.
Adoption, Ratification
After
the endorsement of the statutes by experts and then Ministers of
Finance, the next step will be its adoption of Heads of State. But for
the Fund to go operational there is need for ratification of the
statutes by at least 15 countries. This ratification is a parliamentary
act and looking at the different compositions of parliaments of the 54
countries, the ratification would not be easy to come by even if Heads
of State were to endorse it. If the case of the African Investment Bank
whose texts were adopted some four years ago and today, not more than
ten countries have had it ratified by Parliaments of the respective
countries were anything to go by, then the operationalisation of the
Fund would not be for tomorrow.
Capitalisation of the Fund
According
to Prof. Jean Marie Gankou, Steering Committee Chairman of the African
Monetary Fund, there are three hypotheses on the capitalisation of the
fund. There is a school of thought for 30 billion USA dollars, (about
FCFA 14.362 trillion), some 42 billion dollars (about FCFA 20.107
trillion) and others more than 60 billion USA dollars (about FCFA 28.724
trillion). Even though a majority of the experts reportedly bought the
42 billion dollar standpoint, conclusions have not yet been arrived at.
But sources say 22 billion dollars is under consideration. The 54
countries of Africa will contribute according to their strengths.
Governance Hurdles
The
African Monetary Fund is out for continental monetary cooperation,
secure financial stability, facilitate trade and promote high employment
and sustainable economic growth. The 54 countries of the continent do
not have the same economic viability and so their contribution to the
Fund will not be the same. There will be a Board of Governors to
implement the rules and regulations on its functioning. Yes! But
anticipated superiority complex of some giant economies cannot be easily
waved aside here.>>>
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