“The Accidental Ecowas & AU Citizen”: Aid-Exit Plan Found: Enter ECOWAS...
Last week, the Business and Financial Times paper covered an all-important story entitled “Wanted:Aid-Exit Plan”. In my view, it brought into sharp relief the absolute necessity by African countries of pursuing by any means necessary a more sub-regional path through ECOWAS.
The premise of the article was rooted in three points: first, given Ghana's graduation in November 2010 from low-income to lower-middle income status, it is likely to lose out concessional finance from the World Bank, “which has been the country's most important creditor for the past three decades”; second, after Ghana's recalibration of its GDP per capita to USD1,363, the country was “travelling the road” of losing “not just IDA funding, but other bilateral and multilateral assistance.” Finally, for Ghana to “build up its credibility”, it must—as per the findings of Western economists and consultants--”show fiscal restraint, maintain macroeconomic stability and demonstrate that it is capable of putting funds to productive use.”
All these points notwithstanding, the picture is too gloomy, and optimism can easily be found through ECOWAS.
New Realities,Old opportunities
The bottom line is that cheap loans may have dried up, but through the Lome-based ECOWAS Bank for Investment and Development (EBID), Ghana can easily obtain funding to finance both its private and public sector initiatives.
Formerly known as the ECOWAS Fund, EBID is the principal financial institution of ECOWAS. With its holding company operating through its two subsidiaries—the public-sector-focused ECOWAS Regional Development Fund (ERDF) and the private-sector-led ECOWAS Regional Investment Bank (ERIB has), EBID remains the financing bank of NEPAD projects in the region. In so many ways, it is the European Investment Bank counterpart in the ECOWAS sub-region, and has been around since the inception of ECOWAS in 1975.
Observers of the sub-region believe EBID has, in many respects, been a trailblazer in the sub-region in the way it has maintained a consistent brief of fostering greater integration in the sub-region among its member states – especially in the light of the conflicts that mired the sub-region in the early nineties. So focused has it been in facilitating sub-regional integration that in 2004, in conjunction with the African Development Bank, it set up a Conflict Prevention Fund, which is indeed managed by EBID.
Unbeknownst to many, EBID is the largest shareholder of the Ecobank group, which also has its headquarters in Lome. EBID's subsidiary ERIB also has shares in the capital of the so-called “ECOMARINE”, which is a West African maritime transport company, while ERDF co-finances integration of electric networks of Niger; Benin; Togo; and Ghana., extending it towards Cote d'ivoire.
Simply put, ERIB—concentrating on promoting the private sector and commercial sub-sectors in the ECOWAS zone—grants medium and long-term loans for commercial projects in all sectors; conversely ERDF—specializing in the disbursement of funds to the public sector—finances basic economic infrastructure and poverty-alleviation projects. These include medium and long-term concessionary loans for basic infrastructure, as well as economic and social projects in member states.
Ghana and EBID
Ghana naturally has a relationship that is expressed through its relationship as a member of ECOWAS. More recently, though, EBID came closer to home in Ghana when in May this year, no less than the incumbent Minister of Finance Dr.Kwabena Duffour was elected Chairman of the governing board of the ECOWAS Bank for Development and Investment (EBID) at the end of the bank's ninth ordinary session in Accra.
At the same meeting, Duffour said that in Ghana, EBID had financed private sector in the areas of hotel, infrastructure, engineering and social amenities. With regard to the public sector, EBID's interventions in Ghana include electrification of 114 communities in the Ashanti and Brong Ahafo regions to the tune of $30 million; modernization of the headquarters of the Ghana national fire Service at the cost of $15 million.
In October, Ghana News Agency reported that EBID is negotiating with Chinese banks “to raise $1.5 billion to finance infrastructure projects in four French-speaking countries.” It further reported that in July this year, EBID signed a credit line of $150 million with India for various projects in member states. The Accra meeting was likely to also appoint a new president of the bank, as well as set new limits in authorized capital for the bank.
The meeting would conclude with Dr.Duffour himself saying that the meeting discussed strategies to make the institution “more relevant to West African economies in the face of the current financial crisis in Europe.”
Given these statements, it then beggars serious belief that any Ghanaian might feel that an “aid-exit plan” needs to be found. None needs finding. We already have it right here in the sub-region we like to call the ECOWAS zone.
Add to that the fact that ECOWAS is finalizing a Common External Tariff(CET) for its customs union, which would, in theory, give the sub-region some clout at the World Trade Organisation, and you have an ECOWAS that needs monitoring now more than ever to ensure that it delivers a sustainable and prosperous West Africa to all its citizens.
In 2009, in his capacity as a “Do More Talk Less Ambassador” of the 42ndGeneration—an NGO that promotes and discusses Pan-Africanism--Emmanuel gave a series of lectures on the role of ECOWAS and the AU in facilitating a Pan-African identity. Emmanuel owns "Critiquing Regionalism" (http://www.critiquing-regionalism.org). Established in 2004 as an initiative to respond to the dearth of knowledge on global regional integration initiatives worldwide, this non-profit blog features regional integration initiatives on MERCOSUR/EU/Africa/Asia and many others. You can reach him on [email protected] / Mobile: +233.268.687.653.