“The Accidental Ecowas
& AU Citizen”:
Aid-Exit Plan Found: Enter ECOWAS...
By E.K.Bensah Jr
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 42nd
Generation—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 ekbensah@ekbensah.net / Mobile: +233.268.687.653.
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