Washington DC, October 17, 2019: In a move to entrench financial independence and sustainable implementation of regional integration agenda in COMESA, a Joint Committee of Ministers of Finance and Central Bank Governors have decided to set up a technical working group to assess and come up with modalities for the operationalization of the COMESA Common Market Levy.
The Levy is provided for in the COMESA Treaty as means of generating resources for financing Common Market activities. However, key aspects of the Levy such as incomes earned from activities undertaken by the Common Market has never been operationalized. This has created budget deficits which are addressed through support from Development Partner, which is not sustainable in the long run.
This has prompted COMESA Secretariat to reach out to the Ministers and the Governors to deliberate on ways to enhance the implementation of COMESA Monetary Integration Programme and modalities for sustainable financing of the COMESA integration agenda.
The meeting of the Joint Ministerial and Governors Committees took place on 16 October 2019 in Washington, DC on the sidelines of IMF/World Bank 2019 Annual Meetings. It was attended by Ministers of Finance and Governors of Central Banks from Djibouti, DR Congo, Egypt, Eswatini, Libya, Kenya, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Tunisia and Zambia.
Making the case for implementation of the Common Market Levy, Secretary General (SG) of COMESA Chileshe Kapwepwe emphasized the need to intensify efforts to deepen the process of macroeconomic convergence and financial intermediation in COMESA region given the current enormous challenges.
“COMESA needs a guaranteed, predictable and adequate financial resources for the smooth execution of its regional integration agenda,” she stressed. “Introducing the Community Levy is in line with COMESA Treaty provisions and will go a long way in raising significant resources for harmonious development of the region.”
The Minister of Finance of Congo DR, Mr. Sele Yalaguli reaffirmed this position stating:
“COMESA continues to lack sufficient funding on a sustainable basis to finance its flagship programmes,” he stated. “It is time that COMESA Member States find a sustainable way to fund.”
He said that COMESA’s initiatives in deepening integration process will complement member countries efforts to improve productivity and ensure diversification, partly through increased intra-regional trade.
Currently, over 70% of the COMESA Budget comes from development partners, a situation that is now being considered untenable given the changing financing mechanism of funding agencies.
Similar regional economic communities such as the Economic Community for Western African States (ECOWAS) and the Economic Community for Central Africa States (ECCAS) have successfully implemented such levies for sustainable financing of their integration agenda.
Former Deputy Chair of the AUC Mr. Erastus Mwencha, who is also a former Secretary General of COMESA was the key note speaker and shared insights on financing of regional integration in Africa in general, and the operationalization of the COMESA Common Market Levy, in particular.
In attendance were staff from the COMESA Secretariat and the COMESA Monetary Institute.