Africa: World Bank Presents a Regional Integration Assistance Strategy for the Central African Economic and Monetary Union

WASHINGTON, February 6, 2003—The World Bank’s Board of Executive Directors today discussed a Regional Integration Assistance Strategy aimed at improving trade links and enhancing the economic integration of six Central African countries. The strategy suggests IDA funding for various technical assistance and infrastructure investments over the next five years.

The strategy will support the Central African Economic and Monetary Community (CEMAC) to improve trade links between its member countries—Cameroon, the Central African Republic, Chad, the Republic of Congo, Equatorial Guinea, and Gabon. It will do so by planning to build new roads and improve existing ones, modernize and integrate the financial sector, and by speeding up transaction time at the ports and customs. This will facilitate the movement of goods, people, and capital and reduce transaction costs.

Central Africa is well endowed with natural resources, including petroleum, gold, tin, bauxite, uranium and iron ore, yet includes some of the poorest people in the world. While poverty reduction is essentially a national concern,  regional integration can contribute to its achievement through the establishment of  conditions to promote accelerated growth, by ensuring more stable macroeconomic conditions, greater openness to the rest of the world and a more favorable business climate.

Trade facilitation planned under the strategy will complement ongoing efforts to reform customs practices and transit processes, the latter currently holding up goods in the port of Douala, Cameroon for weeks—a delay that it is hoped can be brought down to days.

“It is increasingly recognized that economic integration can be a beneficial for small landlocked economies,” said Marie-Françoise Marie-Nelly, who heads Economic Integration in Africa at the World Bank. “By increasing integration between these countries, you’re going to generate greater domestic economic growth and enable the region to benefit more from global trade and investment.”

Income levels among these states vary widely, from close to US$4,000 in Gabon to less than $300 in the Central African Republic and Chad. The incidence of poverty is high in all countries, with more than half the population living on less than $1 a day. Between four and 13 percent of the people suffer from HIV/AIDS.

While covering a vast geographic area of roughly three million square kilometers, the Francophone sub-region is the smallest of the current African regional arrangements with a population of about 31 million people. The grouping encompasses both more prosperous coastal economies and two poorer landlocked countries:  Chad and the Central African Republic.

CEMAC is one of the oldest regional blocs in Africa. It evolved from a loose customs union to a full-fledged economic and monetary union in 1994, whose treaty was ratified in 1999 by all member states. The World Bank last year funded a project of the Central African Central Bank (BEAC), to upgrade the banking payments system for the Central African Economic and Monetary Union. An identical Regional Integration Assistance Strategy for the West African Economic and Monetary Union (UEMOA) was approved in August 2001.

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For more information on the Bank’s work in Africa, please visit:
www.worldbank.org/afr

For more information on the Bank’s work on trade, please visit:
http://www1.worldbank.org/wbiep/trade