Monetary Harmonization Programme
COMESA has adopted a phased monetary co-operation programme which aims at establishing a common monetary area. Greater monetary stability facilitates economic integration efforts and provide for sustained economic development. The ultimate objective of the programme is to establish a monetary union, and thus enable the Common Market to attain the status of an Economic Community.
A phased Monetary Harmonization Programme is in place to prepare the ground towards the eventual establishment of a monetary union. The programme enables Member States to:
- Take aggressive economic reform programmes while at the same time learning how to co-operate and co-ordinate their economic policies;
- Through their reform programmes, create an enabling environment for price stability and economic growth to allow a natural development of financial markets and a high degree of economic integration;
- Increase intra-regional trade while narrowing inequalities through economic growth; and
- Form a more balanced monetary union of relative equality in the r
To achieve the above, it was considered essential that the Member States should first go through a process of monetary harmonization with a view to achieving macro-economic convergence. In order to assess progress being made towards this objective, a number of convergence criteria were formulated, with a view of gauging the progress being made by the Member States in the implementation of the programme. The COMESA Monetary Institute CMI undertakes all technical activities to enhance the Monetary Cooperation Programme (See COMESA Institution).
The COMESA Fund
The COMESA Fund protocol was adopted in 2002 for Co-operation, Compensation and Development of the Common Market for Eastern and Southern Africa. The Protocol includes two windows, a special facility referred to as the COMESA Adjustment Facility (CAF) and the COMESA Infrastructure Fund (CIF).
COMESA Adjustment Facility (CAF)
The CAF was founded on Articles 60 and 150 of the COMESA Treaty with the objective of providing adjustment support to countries as they implemented the COMESA regional integration programmes. In accordance with Article 10 of the Protocol, the Adjustment Facility aims to provide support to eligible Member States for revenue loss and economic and social costs of adjustment that:
- Address the loss of customs and other related tax revenues and other conditions mentioned herein in a sustainable manner;
- Contribute to implementing policy reforms designed to improve the efficiency of domestic markets, the business environment, facilitating the reallocation of capital, labour resources and assisting firms in meeting the cost of compliance to new obligations and further meet the social and economic costs of liberalization; and
- Contribute to improving the global competitiveness and resilience of economies and industries so that they can take advantage of new market opportunities through support to productive infrastructures and investment in developing new products, processes and
- The COMESA Fund Ministers provides oversight on the Adjustment Facility and is guided by the Operational Regulations of the CAF that covers eligibility criteria for Member States, modalities of support and decision-making processes.
Envisaged as a grant funded mechanism, the CAF was operationalized by the Regional Integration Support Mechanism (RISM) through a Contribution Agreement between COMESA and the European Union (EU) in 2007 with funding of €78 million under the 9th European Development Fund (EDF). Additional funding under the 10th EDF has since been secured through the RISM consolidation Contribution Agreement with funding of €33 million. This brings the total funding under CAF to slightly over €111 million.
COMESA Infrastructure Fund (CIF)
The COMESA Infrastructure Fund (CIF) is one of the two of the COMESA Fund protocol that was adopted in 2002. The other is the COMESA Adjustment Facility (CAF). The Fund is managed by the Trade and Development Bank (formerly PTA Bank.)