Sunday, December 16, 2012

COMESA in Africa...

COMESA stands for Common Market for Eastern and Southern Africa. It is a union of the central bankers in 19 countries in Africa.

It was created in December 1994 with a big goal, but its reality is now "economic prosperity through regional integration", particularly to promote free trade among the member nations through cooperation and proactive intervention.

Here are some statistics for COMESA countries:
  • 19 countries including Rwanda, Burundi, Egypt, Tanzania, Uganda, Kenya, Ethiopia, Libya, Malawi, Swaziland, Sudan etc.
  • 20 central bankers
  • 423 million people
  • 12.8 million square km
  • GDP growth 5.1%
  • Intra-COMESA trade $18.8 billion (2011)
Minister Kanimba Delivering a Speech
I was privileged to attend the COMESA's 18th meeting held at Hotel de Millie Collines in December 2012 in Rwanda. Rwanda's central bank, National Bank of Rwanda, hosted the event. The guest of honor was the Minister of Trade and Commerce, Mr. Francois Kanimba. Mr. Kanimba was Rwanda's central bank governor for 10 years prior to the current post. 

COMESA launched the intra-COMESA affordable settlement system, called REPPS or Regional Electronic Payment and Settlement System. This system settles among central banks within COMESA, thus bypassing the traditional correspondent bank system for international trade transactions. It is not uncommon for a trade business to pay 3-5% fees for an international trade transactions but REPPS can handle the same transaction at 0.25% of the transaction amount. That will be significant cost savings. Moreover, the settlement time will be shorter at T+1 day. REPPS will be secure with transactions communicated through SWIFT and cleared through the central bank in Mauritius.
It sounds like a good idea.
Currently, only Mauritius and Rwanda have signed up. Swaziland, Zambia, Egypt and Kenya are in line to sign up also. I saw a regional cooperative union in action for efficiency and result. May this become a good example of an efficient and effective regional union in Africa and else where. - Jeffrey 

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