Finance experts from Ministries of Finance and Central Banks from the region have called for the revision of the COMESA macroeconomic convergence criteria and the road map to the Monetary Union. This was revealed during the Second Meeting of the Committee of Experts on Finance of the COMESA Convergence Council held from 4 – 6 September 2019 in Nairobi, Kenya.
The officials deliberated on the proposals for the revision of the COMESA Macroeconomic Convergence Criteria, the Template for Reporting Fiscal Risks and the Common Market Levy for the purpose of generating resources for financing Common market activities. This is expected to enhance the implementation of the COMESA Regional Integration Agenda.
Speaking during the meeting, Assistant Secretary General, Programmes Amb. Kipyego Cheluget emphasized the importance of harnessing fiscal policy instruments to achieve SDGs. He stated that fiscal policy is vital for “crowding in” private investment in the region which has a significant effect on real GDP.
In order to ensure effectiveness of fiscal policy, Amb. Cheluget emphasized the importance of improving governance in revenue collection; leveraging technology to reduce the cost of compliance and tax collection and widening the tax base. Other factors are to reduce corruption, improving the quality of public spending and introduction of an effective tax administration among others.
The revised Convergence Criteria is aimed at coordinating member countries’ macroeconomic policies in the interests of the stability and sustainability of the integration process.
Former AU Deputy Chairperson who also once served as COMESA Secretary General Mr Erastus Mwencha gave the key note address and shared insights on how to operationalize the Community Levy.
Speaking at the same event, Assistant Secretary General (Administration and Finance) Dr Dev Haman noted the need for exploring alternative financing mechanism for COMESA programmes. He added that COMESA has continued to face challenges having a sustainable financial base to finance its flagship programmes.
He therefore emphasized that it is time that COMESA member States find a sustainable way to fund the COMESA Regional Integration Agenda. He said one possibility is to operationalize Article 168 of the COMESA Treaty on the Common Market Levy for the purpose of generating resources for financing Common market activities.
The meeting was attended by representatives from twelve Member States namely: Burundi, Djibouti, DR Congo, Egypt, Eswatini, Kenya, Madagascar, Malawi, Seychelles, Sudan, Uganda and Zimbabwe. The revised report will be considered by Ministers of Finance and Governors of Central Banks on 16th October, 2019, in Washington DC on the sideline of the 2019 IMF/World Bank Annual Meetings.
This Committee is a technical arm of the Convergence Council comprising Ministries of Finance and Central Bank Governors. It was created to spearhead the COMESA Financial Integration Programme.