ECOWAS is working to create a single investment jurisdiction among member countries to ensure accelerated development of Small and Medium Scale Enterprises(SMEs) and to attract extra-regional Foreign Direct Investment, Professor N'galadjo Lambert Bamba, Commissioner Macroeconomic Policy said on Wednesday.
In a speech read for him by Dr. Jonathan Aremu at the opening of a two-day conference on Integration of Financial Markets in ECOWAS Common Investment Market in Accra, Prof. Bamba said the Commission was, therefore, developing a Common Investment Code and a regional investment policy framework to facilitate new investments through removal of bureaucratic impediments.
Besides, the policy will also allow Community-owned firms to be subjected to national treatment in member states and given favourable treatment than foreign owned companies.
"We expect that the regime of ECIM will foster the growth of regional enterprises, including SMEs in addition to enhancing the attractiveness of the region to foreign investment," he said.
ECOWAS heads of state and governments adopted the supplementary Acts on Common Investment Market (CIM) Rules and Competition Rules in December 2008 to accelerate cooperation in the core areas of trade, finance and investment to realise the goal of an integrated economy in a step-by-step manner.
The idea is to make use of regional synergy to maximise the benefits of regional liberalisation and to minimise their negative impacts on the region.
Prof. Bamba said the goal of the ECIM policy is to facilitate the continued formation and consolidation of trans-community firms, including SMEs and to attract extra-regional FDI especially into sectors regarded as the economic drivers for the region by leveraging the synergies of the consequent single market economy. Central to this is the creation of the region as a single investment jurisdiction.
It is in this direction that an integrated financial system in ECOWAS Community was crucial to the effective implementation of the regional integration programmes because official sources of external capital into the region are drying up.
There is also limited domestic pool of savings in each of the national economies while national stock markets are too small, necessitating the need to facilitate foreign direct and portfolio investment.
Prof. Bamba said financial market integration would offer opportunities for expanding the range of financial products and services available in the member countries.
"We must therefore focus on building an integrated financial market that will provide new means for companies to strengthen and diversify their financing structure, reduce financing costs and better manage financial and other risk," he said.
To achieve this, Prof. Bamba called for enhanced collaboration among financial market operators in the sub-region through Memorandum of Understanding and other agreements that allow for flexibility in networking, coordination, cooperation and exchange of information with the view to removing barriers to capital market integration.
In addition, laws and regulations, accounting and governance standards and development of a regulatory framework need to be harmonised in line with enforcement, compliance, investor protection and information sharing.
Prof. Bamba said member countries must also develop the necessary enabling laws and regulations to cater for cross border financial transactions within the region.
The two-Day conference is being held in partnership with the West African Bankers' Association.
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