page 23 LEAD BUSINESS

page 23 LEAD BUSINESS

Intra-Africa trade at 11% world’s lowest

By Abdullateef Salau

Africa has the lowest figure of intra-continental trading in the world, with its members posting just 11 per cent of trading with one another, the Coordinator, African Trade Policy Centre (ATPC), David Luke, has disclosed.

Luke, who stated this on Wednesday in Abuja at the opening session of the regional consultative meeting on the establishment of a Continental Free Trade Area (CFTA) in the Economic Committee of West African States (ECOWAS) region, added that Africa’s poor showing is followed by Asia, which has 25 per cent. In Europe, it is above 60 per cent.

The ATPC Coordinator then urged African countries to put in special efforts to increase the level of intra-African trade and cushion the continent’s economies from demand fluctuations from other continents.

The meeting, attended by senior officials and directors of trade from ECOWAS member states, was aimed at facilitating consultations and dialogue among ECOWAS member states on the CFTA with a view to developing regional strategies for effective engagement in its negotiations.

In January 2012, the Summit of Heads of State and Government endorsed the action plan on boosting intra-African trade (BIAT) and decided on the establishment of the CFTA.

Negotiations for the CFTA were launched during the African Union (AU) Summit held in Johannesburg, South Africa on June 15, 2015, with 2017 as the indicative date for the completion of negotiations.

Issues that will be discussed at the 2017 meeting include the current state of trade liberalization in ECOWAS, the monitoring strategy for BIAT, studies on the trade potential of the CFTA, principles guiding its negotiations and the CFTA institutional arrangements.

African Union (AU) Commissioner for Trade and Industry, Mrs. Fatima Haram Acyl, represented by Mrs Treasure Maphanga, said the meeting would enable member states to share experiences in the development of national and regional action plans on boosting intra-Africa trade.

The endorsed action plan incorporates trade policy, trade facilitation, productive capacity, trade-related infrastructure, trade finance, trade information and factor-market integration.

The meeting is expected to put together recommendations for the consideration of various ECOWAS policy organs in order to promote national and regional ownership of the BIAT/CFTA agenda.

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SEC, DMO to ensure states don’t embezzle funds from capital market

By Chris Agabi

The Securities and Exchange Commission (SEC) and the Debt Management Office Nigeria (DMO) have assured they will collaborate to ensure funds raised by state governments from the capital market are properly utilized.

The Director-General of SEC, Mounir Gwarzo announced the decision when his counterpart at the DMO, Dr. Abraham Nwankwo visited him in his office in Abuja.

Gwarzo said the utilization of funds raised from the market is very important, hence the Commission has taken monitoring of the utilization of issue proceeds to the highest level.

“The public seems to think that money is not well utilized but I want to assure you that at SEC, utilization is very key and our inspection is at a very high level. What we have done is to create a committee rather than allow a particular division to do that. The membership of the committee is drawn from various departments to leverage on different experiences.

“For the states that have come to the market, already one or two states have been visited and we have restructured the inspection teams. Instead of having only one team, we now have three teams and we gave them the mandate that from now till December, all those states have to be inspected. We have the previous inspections reports and anytime you need them, we can share with you so that you too can have the information,” he said.

Gwarzo restated the commitment of the Commission to implementing the 10-Year-Master Plan, one of whose key objectives is to revive and transform the bond market.

Nwankwo explained that one of the purposes of the visit was the need to relate and work closely from time to time to achieve set goals.

“I think that is an area we need to work very closely on, given the emerging realities. States are under tremendous financial stress. In respect of their bank loans, you are aware of the initiatives government approved for us to take to reduce the pressure of bank loans on them,” he said.

He called for caution in dealing with the indebtedness of states to both the money and capital markets because, as he said, it is complicated. “First of all, because they went through your regulatory procedures, and appropriately so. Secondly, they are not just owing one bank. It is not just one state owing a bank but a state owing as many as 1000, depending on the number of investors that participated, so it is a little more complex,” he said.

Nwankwo pointed out that many stakeholders are getting concerned about the propriety of utilization of the proceeds of money raised from the capital market.

“Again, that is an area we need to work closely with SEC on. It is completely under the purview of SEC to make sure that money raised from the capital market through issuance of bonds in particular, whether by corporate bodies or by sub-nationals, is well monitored. It is also important to ensure that projects and utilization of proceeds are well monitored,” he stressed.