Government calls for macro-economic stability in Comesa
Finance Minister Maxwell Mkwezalamba has called for more efforts towards attaining macro-economic stability with the 19-member Common Market for Eastern and Southern Africa (Comesa) trade bloc.
The former African Union (AU) Commissioner for Economic Affairs has also advised Comesa member states to avoid ‘disharmonies’ in the implementation of both fiscal and monetary policies if the trade bloc is to achieve both macro-economic stability and fiscal discipline.
He offered the advice in his official address marking the opening of the 19th meeting of the Comesa committee of Central Bank Governors at the Bingu International Conference Center in Lilongwe on Wednesday.
The meeting will be conducted under the Comesa Monetary Cooperation meetings scheduled between 24th and 30 November, 2013.
“There is need to achieve fiscal discipline which requires avoiding disharmonies between fiscal and monetary policies in order to achieve macro-economic stability. I am glad to note that the tools for the implementation of the Multilateral Fiscal Surveillance Framework are designed,” said the Finance Minister.
Macro-economic stability often entails low and stable inflation rate, low long-term interest rates, low national debt relative to a country’s Gross Domestic Product (GDP), low fiscal deficit-the gap between government expenditure and tax revenue minus borrowing and grants-as well as currency stability.
Mkwezalamba’s call comes at a time when Comesa is implementing its Monetary Harmonisation Programme agreed in 1990 and later endorsed by Comesa Treaty in 1993.
The programme aims at the gradual establishment of a full monetary union by 2020, irrevocable fixation of exchange rates, harmonisation of monetary policies by central banks, creation of a single currency and a common monetary authority.
He said the speedy implementation of the fiscal surveillance framework will enable member countries to strengthen their Public Finance Management Systems; enact Fiscal Responsibility Acts to enforce fiscal responsibility, transparency, and accountability within Comesa.
Commenting on trade, Mkwezalamba said he was pleased that there was a phenomenal increase in intra-Comesa trade from $2.5 billion in 1999 before the establishment of Comesa Free Trade Area (FTA) to $18.7 billion in 2011.
Mkwezalamba said such a significant improvement in trade is a sign of progress that Comesa is making towards promoting trade among member states.
He said it was encouraging to note that heads of States and Governments of member countries of Comesa, Sadc and the East Africa Community (EAC) signed the declaration of launching the negotiations for the establishment of the Comesa-Sadc-EAC Tripartite FTA on 12 July 2011 in South Africa.
“I strongly believe that closer trade and market integration which Comesa is pursuing and fast tracking monetary and financial integration which will culminate in a monetary union should be undertaken simultaneously.”
Outgoing chairperson for Committee of Comesa Central Bank Governors Monique Nsanzabagawa noted that regional integration within Comesa is a difficult task, which he said can be accomplished if there is political will among member states.
