UEMOA urged to boost its impact on inter-regional trade
The impact of the West African Economic and Monetary Union (UEMOA) on trade within the zone is “significant and positive”, recognized the Guinean economic statistician Ibrahima Camara in a paper presented on Tuesday, October 29, during the second day of the eighth African Economic Conference (AEC) held in Johannesburg.
He made these remarks during a panel discussion on the “Impact of Currency Union on Trade” and urged authorities from UEMOA member states to boost the impact of this sub-regional organization on interregional trade.
To achieve this, UEMOA authorities must pursue efforts to put in place the joint trade policy initiated in 1996 within the union.
Camara, who introduced a paper entitled “Impact of Monetary Union on Trade Exchanges: The Case of the West African Economic and Monetary Union”, also asked the union’s authorities to allow products to reach the zone’s various markets by further reducing tariff and non-tariff barriers through the liberalization of inter-regional trade.
He also hoped that UEMOA would develop an industrialization policy based on substituting imports by processing local raw materials on site in order to boost its impact on interregional trade.
Camara recommended that the UEMOA promote the specialization of production in its member states, taking into account the comparative advantages.
In his view, this would create further opportunities for trade between members.
He said that the UEMOA must also diversify production and export structures by not restricting itself to producing traditional goods (farm produce) and by promoting mutuality between economies.
By analyzing trade within the UEMOA, Camara provided figures from the Central Bank of West African States (BCEAO), demonstrating that total exports for the UEMOA zone are 60.388 billion CFA francs.
Exports within UEMOA represented 13 per cent of total exports and exports to France accounted for only 14 per cent of total exports.
Yet exports within UEMOA are higher than exports to the rest of ECOWAS.
However, imports from ECOWAS (9.488 billion CFA francs) are greater than imports within UEMOA (8.299 billion CFA francs).
Presenting the second paper entitled “Trade Agreements and Trade Flows in ECOWAS: Is sharing a Single Currency the Determining Factor?”, Benjamin Ndong, lecturer and researcher at the Université Gaston Berger de Saint-Louis (Senegal), highlighted the controversy surrounding the contribution of regional trade agreements to regional and sub-regional integration in Africa.
Trade blocs can be ways to increase trade and expand exports, Ndong said, noting that some studies have nevertheless shown that regional trade agreements in Africa have not led to a growth in trade.
He appealed for the currency obstacles to be lifted for cross-border payments within ECOWAS, believing that this would be the key to economic integration.
Ndong complained that interregional trade is relatively limited within ECOWAS, explaining that it accounts for only nine per cent of total exports from member states and 10.5 per cent of all imports.
Trade with UEMOA countries shows more vitality than trade within ECOWAS, he went on to explain.
The African Economic Conference is organized jointly by the African Development Bank (AfDB), the United Nations Economic Commission for Africa (ECA), and the United Nations Development Programme (UNDP).
It brings together Heads of State and experts in business and development from around the world to discuss regional integration in Africa and its role in strengthening economic growth and the well-being of citizens all over the continent.
The conference is an opportunity to study efforts in different sectors and fields, such as finance, road transport, energy pools, water resource management, tax convergences, and labour mobility.