VZCZCXRO5698
RR RUEHMA RUEHPA
DE RUEHUJA #2485/01 2641039
ZNR UUUUU ZZH
R 211039Z SEP 06
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC 7205
INFO RUEHOS/AMCONSUL LAGOS 5094
RUEHZK/ECOWAS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 ABUJA 002485 
 
SIPDIS 
 
SIPDIS 
 
STATE PASS TO USTR FOR C. HAMILTON 
TREASURY FOR LUKAS KOHLER/DAN PETERS 
USDOC FOR 3317/ITA/OA/KBURRESS 
USDOC FOR 3130/USFC/OIO/ANESA/DHARRIS 
 
E.O. 12958: N/A 
TAGS: ECIN ECON EFIN PREL ECOWAS NI
SUBJECT: ECOWAS MINISTERIAL MEETINGS 
 
¶1. SUMMARY. On August 28, 2006, the Economic Community of West 
African States (ECOWAS) held ministerial consultations to focus on 
four issues, restructuring the Secretariat into a Commission, 
regionalization, the West Africa/European Union (WA/EU) negotiations 
for an Economic Partnership Agreement (EPA), and migration. The 
restructuring faces funding issues and the EPA negotiations are 
stuck in Phase I and need to resume soon to meet the December 2007 
deadline. The West African Monetary Institute (WAMI) briefed on 
progress toward the December 2009 deadline to implement the Second 
Monetary Zone. That too has challenges due to civil unrest, high 
fuel prices and member government's ability to maintain budget 
discipline. End Summary. 
 
¶2. On August 28, 2006, ECOWAS held ministerial consultations to 
focus on restructuring the Secretariat into a commission and 
strengthening capacity, implementing regional policies and programs, 
review the status of the West Africa/European Union (WA/EU) 
negotiations for a regional Economic Partnership Agreement (EPA), 
and migration of ECOWAS citizens within and outside the region. 
Ministers of finance, trade, commerce and foreign affairs of ECOWAS 
countries, the World Bank, IMF, ADF, UN, and the European Union, and 
Abuja based diplomats attended. 
 
ECOWAS Restructuring 
-------------------- 
 
¶3. In January 2006 meetings in Niamey ECOWAS members approved 
restructuring and adopted a new legal framework to more efficiently 
implement ECOWAS policies and programs. The new structure will 
consist of a Commission, Community Parliament, Community Court of 
Justice, and the ECOWAS Bank for Investment and Development (EBID). 
 
 
¶4. The commission will have nine members--a President, Vice 
President and seven commissioners, with a timetable for the rotation 
of positions.  The President will be responsible for international 
cooperation, the Vice President for coordinating relations with 
ECOWAS member countries and the seven commissioners will be 
responsible for the following portfolios: Administration and 
Finance; Agriculture, Environment and Water Resources; Human 
Development and Gender; Infrastructure; Macro-economic policies; 
Political Affairs, Peace and Security; and Trade, Customs, and the 
Free Movement of Persons. 
 
¶5. The parliament will have a Plenary, Bureau of Parliament and the 
Conference of Bureaus. The Plenary will be the supreme authority 
consisting of representatives from member states. The Bureau of 
Parliament will be responsible for administrative management and 
will have a Secretary General, Speaker and four Deputy Speakers. 
This is intended to bring more structure to administrative and 
financial systems. 
 
¶6. The administrative function of the Court of Justice 
will be increased from two to three members consisting of a 
President, Vice President and the most senior member of the court. 
The terms of office of President and Vice President will be 
renewable every two years. The other members of the court will be 
appointed to non-renewable four year terms with a rotation plan 
among member states. 
 
Migration 
--------- 
 
¶7. Although there is a protocol for the free movement of persons 
with the right of residence and to establish themselves within all 
the territories of member states, migration has become a very 
contentious issue within and outside the region.  The two dominant 
categories of immigrants under contention are (1) those forced 
through civil unrest and, (2) those motivated for economic reasons. 
 
Regional Integration 
-------------------- 
 
¶8. ECOWAS's principal initiatives on trade and customs cooperation 
include the establishment of free trade areas with zero import duty, 
total elimination of all non-tariff barriers on community originated 
goods, a regional-oriented trade policy, a Common External Tariff 
(CET) and Economic Partnership Agreement (EPA).The consultations 
stressed that each member's national policies should take a regional 
approach that includes a coherent trade policy with a Common 
Economic Tariff (CET).  This is (supposedly) on track for approval 
by the end of this year.  Next year will be used as a transition 
period, and in 2008 the tariffs will take effect. However no member 
country is not obligated to implement all the tariffs until they 
have assessed the pros and cons, as well as the realities of those 
countries within the region that are not part of ECOWAS. The Union 
 
ABUJA 00002485  002 OF 002 
 
 
of French Speaking West African States already has a CET in place. 
 
¶9. Two banks existing banks, the ECOWAS Regional Investment Bank 
(ERIB) for the public sector, and ECOWAS Regional Development Bank 
(ERDB) for the private sector will be combined under the new 
commission structure as EBID, headed by a President and two Vice 
Presidents. 
 
Economic Partnership Agreement (EPA) 
------------------------------------ 
 
¶10. The EPA aims to integrate West Africa into the world economy. 
The main objective is to create a WA/EU free trade area compatible 
with GATT (Article XXIV) and GATS (General Agreement on Trade in 
Services) Article V and to replace the non-reciprocal trade 
preferences under the Lome Conventions. On August 4, 2004 in Accra a 
timetable for EPA negotiations were set with three phases to focus 
on regional integration, improving competitiveness, and trade 
related issues. Phase 1 was September 2004 to September 2005 to 
establish a framework. Phase 2 was September 2005 to September 2006 
to determine the overall structure and draft an agreement in all 
trade related areas to be tabled at meetings in Niamey from October 
3-6, 2006.  Phase 3 was for September 2006 to December 2007; these 
negotiations were to deal with liberalization including the 
dismantling of tariffs on goods and services. 
 
¶11. The negotiations have not moved passed Phase 1, and the EU 
representative stressed they need to resume soon to meet the 
December 2007deadline.  Some delay is due to diverging points of 
view. The EU wants to separate trade liberalization from development 
finance and wants the EPA to promote economic reforms and 
governance. ECOWAS States want to cushion the adjustments and build 
institutional capacity to implement and administer the reforms 
supported by a development assistance component. 
 
West African Monetary Institute (WAMI) 
-------------------------------------- 
 
¶12. Director General, Dr. O. Joseph Nnanna represented WAMI.  Dr. 
Nnanna recently moved from the Central Bank of Nigeria where he was 
the Director of the Research and Statistics Department. WAMI is to 
achieve a Second Monetary Zone in the ECOWAS Anglophone countries of 
Nigeria, Ghana, Sierra Leone, The Gambia and Guinea. When 
implemented the single currency will be called the "Eco". In the 
longer term they expect to merge the Eco with the CFA franc. 
 
¶13. To implement the Second Monetary Zone certain criteria must be 
met by at least two countries in macroeconomic policy, fiscal 
prudence, external reserves, and Central Bank financing of 
government. Deadlines in 2003 and in 2005 were missed. On May 6, 
2006, the "Banjul Declaration" was adopted with a new deadline of 
December 2009 with new criteria, including single digit headline 
inflation, a cap on budget deficit; gross official forex reserves of 
at least three months of exports, and restricting Central Bank 
financing of federal government to 10% of the previous year's 
taxable revenue. Some of the countries in the proposed zone face 
weak currencies, civil conflicts/unrest and the recent inflationary 
jump in oil prices, but considerable optimism remains. 
 
¶14. One major issue still to be resolved is how ECOWAS will be 
financed. In the past it had been through a community levy, but all 
member countries are not contributing now as per the 
protocol/agreement.  Restructuring and expansion will put additional 
pressures for increased contributions and capacity of member 
countries for implementation and administration. 
CAMPBELL