The politics of monetary sector cooperation among the Economic Community of West African States members

The author tries to explain why monetary cooperation and integration have been difficulty to achieve among member states of the Economic Community of West African States (ECOWAS). He shows how different interest groups--both members and nonmembers--have over time influenced policies and positions on various ECOWAS member states. Unfortunately, most negotiations for cooperation among ECOWAS member states have a much better monetary cooperation and integration program, mainly because of France's active support and participation in negotiations, mediation, and consensus building. Unfortunately, Nigeria-which has been the main force behind bilingual regional integration in West Africa--has a different agenda from France. Its promotion of a bilingual economic grouping in West Africa was in part an attempt to reduce France's influence in West Africa, so France is unlikely to allow economic and monetary cooperation and integration along Nigerian lines. The fact that Nigeria is still a weak state does not help. The choice for francophone West African countries is therefore between closer ties with France--which has provided development aid, ensured currency convertibility, and guaranteed monetary stability in those francophone countries--and closer ties with Nigeria (which has done none of the above for itself, much less for its neighbors). The increasing convergence of macroeconomic indices among ECOWAS member countries--which is essential for monetary cooperation and integration--has come about largely because of events outside of ECOWAS or because of externally (International Monetary Fund) imposed structural adjustment programs. France's support is essential for the development of a meaningful ECOWAS.Payment Systems&Infrastructure,Earth Sciences&GIS,Economic Theory&Research,National Governance,Fiscal&Monetary Policy,National Governance,Trade and Regional Integration,Earth Sciences&GIS,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Economic Theory&Research

The small and medium scale industries equity investment scheme in Nigeria: a critique

The introduction of the Small and Medium Scale Industries Equity Investment Scheme in Nigeria represents the most recent experiment aimed at promoting this sector of the economy that is vital for sustained economic development in the country. This paper attempts a critique of this new Scheme. It argues that the main reason why SMEs have been unsuccessful in Nigeria has been because of the unstable macroeconomic environment and the dearth of basic infrastructure. This has made their cost of operations unacceptably high, relative to their capital base. Furthermore, the belief that banks have better management structures and experience is erroneous. Huge bank profits are more a consequence of government subsidy of these banks via the foreign exchange market, rather than the consequence of their sound management. Even banks that have good management skills may not necessarily have the necessary experience to manage SMEs. In fact, this could end up being an unwelcome distraction from their main business of banking.L’introduction du système d’investissement en capital des petites-moyennes industries au Nigeria représente la première expérimentation pour la promotion de ce secteur qui est vital pour le développement. L’article propose une critique de ce système en soutenant que la faiblesse des petites et moyennes entreprises (PME) au Nigeria est due à l’environnement macroéconomique instable et à l’absence d’infrastructures de base, ce qui a augmenté les coûts opérationnels. En plus, la conviction que les banques ont une meilleure gestion et expérience est erronée ; les profits élevés des banques sont dû plutôt aux subventions étatiques à travers les taux d’échange. Même les banques bien gérées risquent de ne pas avoir les compétences pour suivre les PME. En effet, cela peut représenter une distraction de leur activité principale

Reinsurance in Nigeria: The Issue of Compulsory Legal Cession

In recent times, the business and practice of reinsurance in Nigeria have come under increased scrutiny. Perhaps the most contentious issue in this arena is that of compulsory legal cession, of which the government-owned Nigeria Reinsurance Corporation has enjoyed the benefits since its inception in 1977. This paper traces the origins and development of reinsurance in Nigeria and argues that the compulsory legal cession, which Nigeria Re enjoys, has today outlived its usefulness. Legal cession is however not the only issue in reinsurance in Nigeria. Also of importance is the need for the government to create a conducive, macro-economic environment for the practice of insurance (and reinsurance) in Nigeria. It is the lack of this that has led to the reduced international interest in the Nigerian reinsurance arena. The Geneva Papers on Risk and Insurance (2001) 26, 490–504. doi:10.1111/1468-0440.00134