Experts Call for Stronger Financial and Monetary Cooperation among African Countries.

Addis Ababa, 05 June 2010 (ECA) - Economic and financial experts have called on African countries to increase monetary cooperation in order to guard against global instability and work towards a reformed international financial architecture.

The call came at the end of a two-day workshop titled: “Africa and the Establishment of a New International Financial Architecture: challenges and Opportunities,” organised by the United Nations Economic Commission for Africa in Gaborone, Botswana.  The workshop, which was opened by the governor of the central bank of Botswana, Ms. Linah Mohohlo, took place from 3 – 4 June 2010.

Experts called on ECA to continue analysing proposal for the reform of the international financial architecture and, spreading information and convening debates among its Member States and existing multilateral, regional and subregional organizations on these issues. Formation of financial intelligence units should be pursued to forestall anti-money laundering activities in African countries.

In his welcoming speech to the meeting, Emmanuel Nnadozie, Director of ECA’s Economic Development and NEPAD division, called for more regulation of international finance to avoid mistakes of the past.  “A key component of any new regulatory framework for global finance must rest on the foundation of well-regulated domestic financial markets and financial institutions. This should start by adopting and extending margin, capital and reserve requirements to financial institutions engaged in traditional lending, as well as hedge funds and derivative mark,” he said.

“Regarding the reform of the International Financial Institutions, African countries should continue to argue for increased voice and representation by means of additional Chairs on the IMF and World Bank Boards notwithstanding some of the recent gains in this regard,” Mr. Nnadozie added.

Experts recommended further discussions on proposals for the creation of a Regional Central Bank, a Regional Monetary Fund and a Regional Investment Bank.  They called on the ECA and African Union commission to conduct seminars and meetings to review the evolution of the debates and negotiations with a view to creating these regional financial institutions.

The increasing trend in cooperation among some stock exchanges in Africa to allow for the listing of firms should be encouraged to help raise resources to finance firms in member countries.

Participants underscored the need to be selective in the implementation of international regulations and standards, particularly in the framework of Basel II and called on African countries to develop a hybrid of Basle I, II and the proposed III that would promote sustainable development of the financial sector.