Final Report of the second meeting of the joint ADB, IDEP and ECA interim committe on the association of African Central Banks

UNITED NATIONS

ECONOMIC

SOCIAL COUNCIL AND

ZI653

Distr

26 June 19°B Original: ENGLISH

I

ECONOMIC COMMISSION FOR AFRICA Second Conference of Govern-rs of African Central Banks

Accra, 7-13 August 1968

FINAL REPORT OF THE SECOND MEETING OF THE JOINT ADB, IDEP AND ECA INTERIM COJMITTEE ON THE ASSOCIATION OF AFRICAN CENTRAL BANKS

(Abidjan, Ivory Coast - 17 To 18 May

M68-943

E/0N.H/Ai4A/14

FINAL REPORT OF THE SECOND MEETING OF THE JOINT ABB, IDEP AND

ECA INTERIM COMMITTEE ON TEE ASSOCIATION OF AFRICAN CENTRAL BANKS

(Abidjan, Ivory Coast 17 t« 18 May 1967)

1. The second meeting of the Joint ADB, IDEP and ECA Interim Committee

on the Association of African Central Banks was held in Abidjan on 17 and 18 May 1967. The African Development Bank was represented by Mr.

Sheikh M.A. Alamoody, Vice-President, the African Institute for Economic

Development and Planning* by Mr. Marc"Balin, Lecturer and the Economic Commission for Africa "by Mr. Osman H. Abdel-Salam, Economist, Fiscal and Monetary Affairs Section.

2. As previously agreed (Report of the First Meeting of the Interim Committee), the main business of the Second Meeting of the Committee was to examine the comments and observations received from Central Banks

on the first draft of the Articles of Association of the Association of African Central Banks, and, on the basis of these, issue a revised Draft Articles of Association.

3. The meeting elected I'lr. Sheikh M.A. Alamoody acting as Chairman

and Mr. O.H. Abdel-Salan as Rapporteur. After a word of welcome by the'

Chairman to the representatives of IDEP and ECA the meeting was declared opened and the representative of SCA was invited to give a brief summary of developments since the First Meeting of the Interim Committee.

4. It was noted that out of the twenty-six central banks and similar monetary institutions invited by the Interim Committee to comment on the First Draft of the Articles of Association of AACB, twenty had res ponded. The majority of responses reflected positive support to the est ablishment of the Association of African Central Banks. Some institutions,

t*hough positively inclined towards the establishment of AACB, had informed

the Interim Committee that a formal- decision on the matter was yet to be taken. Few institutions expressed varying degrees of reservations

with regard to the form and scope of the Association as defined in the

Draft Articles of Association, indicating that these provisions had

Page 2

gone beyond what was envisaged by the Governors of Central Banks at their meeting in Addis Ababa in February 1966.

5. The Meeting noted that although the majority of central banks and similar monetary institutions were in favour of the establishment of the Association and there appeared to be sufficient support to launch

the Association (Article 9)? it would further enhance the usefulness

of the Association to endeavour to ensure the participation of all insti tutions or as many of them as possible. It was therefore agreed that in addition to comments and suggestions put forward by approving insti tutions, the points raised by objecting institutions also be carefully examined and' a great effort be exerted to try to all ay all fears ex pressed about the possibility of an over-extended association.

•

6. On examining the arguments of the few objecting institutions it

emerged that their reasoning rested on three raain points* l) The Associa

tion as they saw it from the Draft Articles would be a formal one where as they favoured a loose association of banks, an informal club 5 2) It was feared that the Association would be interferring in the internal affairs of ±tc members and imposing decisions over matters of domestic

monetary and credit policies? 3) It was. felt that the cost of running

the Association i.e. secretariat expenses would be high.

7. With regard to the first point above, the Meeting was of the opinion that the form of the Association as envisaged in the Articles of Associ ation was in conformity with the proposal agreed upon by the Governors of African Banks at their meeting in Addis Ababa. It was noted that agreement by' the Governors Meeting on the Association came as an alter native to the proposal to set up a "Monetary Council of Governors of African Central Banks", when other participants proposed that the formal

mechanism be created under 'the name Association of African Central Banks."

(Paragraph 11, Final Report, Document b/cN. I4/AKA./13.)- Already a loose

form of organization, the Meeting noted that the Association could not be made any looser without prejudicing its very existence. Giving the Association a formal constitution was considered as the most practical way of obviating difficulties concerning its establishment and the extent of its membership as well as uncertainties that would surround its meetings the date,the venue 'and the sharing of expenditures - if meetings were

to be convened on ar? _adjioc basis s depending on the willingness of an institution to invite a meeting of the Association. Difficulties arising from absence of a secretariat could thus be also avoided. The provision

for a secretariat was, moreover, found to assist in the initiation of

another project which the Governors of Central Banks had invited the

Interim Committee to explore, namely the Monetary Research Centre. (See paragraph 13 below.)

8. On the second point,i.e the fear that the Association might turn

out to be a supranational authority that might encroach upon the freedom of its members over matters of domestic monetary and credit policies, the Meeting noted after carefully scrutinizing the Articles of Association

that nowhere in the Articles could it be inferred that the Association

E/CN.U/W/14

Page 3

was intended to assume any such powers. It was farther noted that it was the uuty of its members to see to it that the Association would maintain cue status it was .aeant to have anu to check any possibility

of divergent development. In order to define beyond uoubt the nature ana statute of the Association as well as to ensure its compliance with the spirit of the Meeting of Governors of African Central Banks in Addis Ababa, it was considered appropriate to amend the preamble

of the Articles (para.4) to spell out these points. The amendment,

in fact the audition, was essentially a quotation from the Final iieport of the Mjeting of Governors of African Central Banks, Document E/CN.I4/

MA/13, Addis Ababa, 15-22 February 1966, paragraph 1 of the outline

of the terms of association - Annex VI.

9- The question of cost of financing the Secretariat of the Association was tackled by estimating the expenditure for the first year .of establish

ment (Annex i). The estimates are based on a total staff of twenty-six

including one libraiian, three messengers, three drivers and two cleaners.

Some of the expenses are of a non-recurrent nature, but they cover items which would have to be provided in the first year (Part III of Annex I).

Total costs amount to US$ 364,520. Distributed over the twenty-six prospec

tive members on a flat sum basis, the share of each would be US$ 14,020 to

be made on the basis of some of the applied formulae - for instance on the

structure of subscriptions to the ADE - the individual share of each

country and hence institution would be as set out in Annex III, It was noted'that the latter procedure would be unfavourable to the multi

national central banks if the principle of one institution one vote were

to be upheld. A weighted voting system, it was agreed, would resolve that problem; however, such a voting system it was feared, might introduce some

complications into the functioning of the Association. The Meeting agreed

that neither the manner of sharing of costs nor the possibility of weighted

votes should be incorporated in the Articles of Association, and that it would, suffice at this stabe to indicate these possibilities in the Report

of the Interim Committee. Only the total annual cost would be stated in the Articles of Association, Further details, it was agreed, should be left to the Governors to examine and to select an acceptable alternative at their

next meeting.

10. In connexion with cost of financing the Secretariat of AACB, the ifleetin^ noted that assistance that might be offered by the three regional

institutions ADE, IDi^P and liCA woula contribute to reducing the sum each

.jember would neeu to suacribe. If it were deciaed to have the secretariat

physically attached to one of these ie^ional institutions, the share to

be contributed by the members might be further diminished as it was

likely that the contribution of that institution would be comparatively

greater. The Meeting also took note of the related suggestion that the

secretariat be attached to AI)B and to appoint the President of the Bank,

Chairman of the association of African Central Banks. It was agreed that

if that suggestion were auopted the Articles of Association would have to be amended accordingly.

E/CM.13/AMA/14

Annex I

ASSOCIATION OF AFRICAN CEWThiiL BiiKKS

Estimated expenuiture for tne first year of establishment

Staff costs ana related expenses 1 Secretary General Director Level

1 Assistant Secretary General Principal Officer 2 Senior Expert Economists

2 Miadle Junior Economists 1 Finance Officer ;

1 Personnel Officer 2 Translators

2 Secretary Stenographers .4 Typists - Typing Pool

1 Document Officer

1 Librarian -

3 Messengers 3 Drivers 2 cleaners

P5 P3 P4 P3 P2 G4, G5 G2 G4 G4

Camion Staff Costs

- Installation allowance - Housing allowance - Dependency allowances

-.Contribution to social security - Travel on appointment

- Mission and travel allowances - Miscellaneous

TOTAL

24*050 20,000 34,800 25,200 13,900 12,600 18,100 11,9^0 15*440 5,360 5,360 3,000 3,000 1»600

4|000 36,200 3»8O0 18,700 16,100 10,000

5OG0

194,370

93,800

288,170

II

General expenses - Communications - Utilities

- Kental r'laintenance of equipnent - Office supplies

- Library books and supplies - Reproduction documents - Printing

- Kent for office premises - Miscellaneous

TOTAL PAUT II

8,000 2,000 4,000 1,500 2,000 3,000 3,000 20,000 4,000

47,500

Annex I Page 2

Bring forwards PART III

Equipment

- Office furniture and fixtures 6,000

— Office machines:

3 electric typewriters 3 manual typewriters_

1 calculating machine

1 electronic stencil machine 1 photocopying, machine

1 Motor vehicle for Director

— Motor vehicles ■

- Other eguipnent expenses

1

3 2

,500 450 900 ,000

,000 7,850

5,000 7fooo 3,000

TOTAL PAiiT III . 28,850

Total estimates. Part I, Part II and Part III 364,520

E/CN.14/MA/14

Annex' II

Annex II

ASSOCIATION OF AFRICAN CENTRAL BANKS ARTICLES OF ASSOCIATION

(Revised Draft)

The Signatories to this Agreement,

Recognising the significant role to be played by monetary, "bank ing and financial institutions in promoting the economic development of the African region and in fostering financial stability;

Noting that co-operation is necessary aaong African countries in monetary and financial matters;

Realizing that co-operation among central banks in Africa is a means of assuring continuous and effective co-ordination of monetary and. financial polic~.es among the member countries;

Following *t he recommendations «f tharfc first Meeting of Governors of African Central Banks which was held in Addis Abaha from 15 to 22 February 19'6, to establish an association of African Central Banks consisting of the Governors of Central Banks and representatives of similar monetary institutions, the object of which association would be to promote co-operation in the monetary, banking and financial sphere in the Africa region and to assist in giving direction to the major guidelines along which future agreements between African countries can proceed in these areas.

Have Agreed to establish hereby the Association of African Central

Banks (hereinafter called the "Association") which shall operate and

be governed according to the following provisions:

E 1

Th . "purpose ■'■?" t:■.."' ,: sr-ioc.iri.tion nVIl bo:

1. S?o promote co-opor^ticr. In tho monetary, bankin_ nnd financial rf?Ther^ in the African re

2, io r.3,-'i^t in ; ■• "jrbli'-^l.'inr ^-ii'L.l±:\ r ]:""-.;_; which •■ rrt. :;:-nfG among n c-;untri .- in tl e "onet^ry ^nd financial fields shall pr^cved;

3. ? *■* holp strengthen all Tfrrts -1: ..d ".t triv:/\inf: "."bout ■ ud main taining monetary and financial stability in the continent^

Annex Page 2

AKTICLE 2

FUNCTIONS AND ACTIVITIES

For the implementation of its purposes the Association shall have the following functions*

(a) To provide for periodic meetings of Governors of African Central Banks or their alternates and where Central Banks are non-existent, the heads of similar monetary institutions in the region or their alternations; ...

(b) to promote the exchange of ideas and experiences on monetary and "banking matters and questions of monetary, banking and financial co-operation in Africa?

(c) to facilitate the collection, pooling and dissemination of inf ormatj on ■ on monetary, "banking, financial and other econo

mic matters of interest to its members;

(d) to undertake directly, or by delegation, the study of monetary and financial problems in the African continent, and all such 'matters as may be deemed necessary to the maintenance of

financial stability or generally conducive to greater co-oper ation rrong its ..oT/br-rs;

(e) to organise, directly or through its individual members, seminars, courses and other training programmes for personnel of banking and financial institutions of its members;

(f) to provide technical advice ?.nd assistance which serve its purposes-and corae within its functions °,

(g) to organize a Monetary Research Centre and provide guidelines for its activities, including training programmes 5

(h) to establish sub-regional committees and such other subsidi ary bodies as it deems appropriate for facilitating the

carrying out of its functions snd activities and the fulfil ment of its purposes;

(i) to undertake such other activities and concern itself with any other matters as may advance its purposes.

In carrying out the above functions, the Association shall seek to co-operate with national, multinational, regional and sub-reg ional monetary and financial institutions in Africa.'

The Association shall establish and maintain close relations with

the United Nations Economic Commission for Africa, the African

Development Eank3 the African Institute for Economic Development and Planning and with the Organisation of African Unity.

In undertaking its activities, the Association shall seek the co operation and, wherever appropriate and necessary, the assistance

of other regional and international organizations pursuing similar

purposes.

Annex' IT Page 3

ARTICLE 3

KEMBERST'IP A'7D GEOGRAPHICAL AREA

1. Membership of the Association and its sub-regional committees shall be open to all Central Banks in independent African countries and, where Central Banks are non-existent, similar monetary institutions in the African region.

2. The African region for the purpose of membership and other Asso ciation's purposes shall mean the whole continent of Africa, Madagascar and other African islands.

3. Sub-regions for the purposes of the Association shall be as defined by the Economic Commission for Africa, or as may be determined by the Assembly of Governors from time to time.

4. Membership in the Association shall be acquired in accordance with the provisions of Paragraphs 1 and 2 of Article 8.

ARTICLE 4

SIWOTURE A D ORGANIZATION

1. The Association shall have an Assembly of Governors, an Executive Committee and sub-regional Committees.

2* The Assembly of Governors shall be the governing body of the Asso ciation and shall consist of the Governors or Presidents of Central Banks or Heads "of similar monetarj'- institutions or their alternates -which r-ro ..^t^r^ .f zh'.i ..f;;-oci tion.

3. The Assembly of Governors shall elect from among, its members the Chairman of the Association who shell held office for a period of two years provided h<= continues to represent his institution, 4. The Assembly of Governors shall also elect from among its members

at least on,j Vice-Chairman who shall hold office for a period of two y-jcirs provided he continues to represent his institution.

5. The Chairman of the Association shall preside over meetings of the Assembly of Governors and the Executive Committee, He shall also have powers to convene meetings of the Assembly and the Executive Committee of the Association, In the absence of the * Chairman the Vice-Chairman shall carry out his functions,

6. The Chairman shall represent the Association in its relations with governments and other organizations,

7. The Executive Committee shall consist of the Chairman and Vice-

Chairman (Chairmen) of the Association and the Chairmen- of sub-

regional committees or their alternates,

8. Each sub-regional committee shall consist of the Governors, Presidents or Heads of member institutions or their alternates in- the sub-region as defined in Article 3 paragraph 3*

Annex II Page 4

9- The Assembly of Governors shall provide for a Secretariat. When the Permanent Secretariat is established, the Assembly of Governors

shall elect as Secretary of the Association a person of renowned professional competence in banking and financial matters. If it

is decided to call upon other institutions to provide Secretariat services to the Association,the Assembly shall authorize the Chair

man of the Association to make the necessary arrangements. ■

10. The Assembly of Governors shall dotcrnino the provision of funds that --r.y br, roquirod to moot the needs of the -'ssocinticn ^.nd its

sub-regional committees.

11. The operational costs of the Association oh--.ll n-:t - ::co..d US ■ 3^0,000 p^r ::,nnuri.

ARTICLE 5 MEETINGS

1. The Assembly of Governors shall meet at least once every two years.

Such meeting shall be known as the "Regular Meeting of the Asso

ciation of African Central Banks".

2. The sub-regional committees shall me-.-t at least once a year. Such

meeting shall be known as the "Regular Meeting of the Association's Sub-regional Committees".

3- Extraordinary meetings of the Assembly of Governors or the sub- regional committees shall be called at any tins by the Chairman

of the Association or by the Chairman of the sub-committee

concerned, at the request of a majority of members, after six weeks' notice.

4- The report oi any sub-regional meeting shall be presented to the

next regular meeting of the Assembly of Governors following the sub-regional meeting.

5. The quorum of any organ of the Association shall be a simple major

ity of its iicrbnrship. In cr.r.^ ~-f rv.tt/rG subrittrd to tho vote,

decisions shall be taken by a two-third majority of those present.

6. Each Regular Meeting of the Association will determine the time,

venue and servicing arrangements for the next meeting. Similarly, at each regular meeting of a sub-regional committee, such committee

will determine the time, venue and servicing arrangements for the

next meeting.

7. The Assembly of Governors, the Executive Committee and the Sub- regional Committees may adopt such rules and regulations as may be necessary or appropriate to conduct the business of the Asso

ciation, provided such rules and regulations adopted by the Executive Committee and the Sub-regional Committees shall not be inconsis

tent 'with the rules adopted by the Assembly of Governors.

Annex II.

Page 5

'IRTICLE 6 AilI2TDiiENTS

This Agreement may "be amended at a Regular Meeting of the Associa tion "by a majority of two-thirds of the members of the Association.

ARTICLE 7

SIGNATURE AND DEPOSIT

1. This Agreement, deposited with the Executive Secretary of the United

Nations Economic Commission for Africa (hereinafter called the

Depositary) shall remain open until 31st March 1968 for signature

"by the Institutions listed in Appendix A to this agreement.

2* The Depositary shall communicate certified copies of this Agree ment to all the Signatories.

ARTICLE 8

ACCEPTANCE A£D ACQUISITION OF KEKB'IRSHIF

1. This Agreement shall be subject to acceptance by members who shall signify their acceptance by signing the original copy of the Agree ment deposited with the Depositary or by depositing instruments

of acceptance with the Depositary before 31st March 1968. The

Depositary shall notify each signature or deposit and the dnte thereof to the other Signatories.

2. Institutions which do not acquire membership in accordance with the provisions of Paragraph 1 of this Article may become members after the Agreement has entered into force by accession thereto on such terms as the Assembly of Governors shall determine,

ARTICLE 9 ENTRY INTO F^RCE

This Agreement shall enter into force upon the acceptance by twelve of the signatory Institutions listed in the Appendix to this Agreement.

The Depositary shall notify all the Signatories to this Agreement of the date on which the Agreement comes into force.

ARTICLE 10

FIRST MEETING OF THE ASSOCIATION

1; The Association shall hold its first meeting within three months from the date on which this Agreement comes into force. The meeting shall be convened by the Depositary.

2. Measures shall be taken at such meeting with regard to the organi sation and establishraent of the different Organs of the Association.

Done in Accra, this day

in a single copy in the English and French languages.

E/CN.14/MA/14

Annex III

III

Members' Subscriptions

A H B Share in

* Share 3 t Subscribed,

1. Algeria

2 - Burundi .

3. Congo (Democratic Republic)

4. C&neroon

5« Congo (Republic)

6. Central African Republic 7- Chad

8. Gabon

9. Dahomey 10. Ivory Coast 11. Mauritania 12. Niger 13- Senegal 14. Togo

15« Upper Volta

16. Ethiopia ...

17* Gambia .,

18 . Ghana ■

19« Guinea ...

20. Kenya 21. Libya

22. Madagascar ,

23. Malawi 24. Mali

23. Mauritius-;

26. Morocco

27. Nigeria ..

28. Rwanda ■

29> Siena Leone ■

30. Somalia •

31. Sudan ,

32. Tanzania ■

33. Tunisia

34» Uganda ,

35. United Arab Republic 36. Zambia

B (400 |

c (150 j E (100

A (160 j

C (130 j

B C E A 0

(140

(600

(110 (160 (550 (100

(130

Percentage !' the expenses of of total ■» the Association

2,450 120 1,300

940

1,790 1,030 1,280 250 600 190 520 200 230 1,510 2,410 120 210 220 1,010 630 690 46O 3,000 1,300

10,90 0.535.80

4.18

7.97

4.58

5.70 1.11 2.67 0.85 2.32 0.90 1.02 6.72 10.73 0.53 0.93O.98 4.502.80 3.07 2.05 13.36 5-80

39,732.68

1,931.96

21,142.16

15,236.94

29,052.25 16,695.02

20,777-64 4,046.17

9,732.68 3,098.42 8,456.86 3,280.68 3,718.10 24,495-74 39,113-00

1,931.96

3,390.04 3,572.30 16,403-40 10,206.56

11,190.76

7,472.66

48,699.87

21,142.16

TOTAL 22,460 100.00 364,520.00

Appendix

APP32TC5IX INSTITUTIONS Banque Centrale df Algeria

Banque du Royaume du Burundi

Banque Rationale du Congo (Kinshasa)

Banque Centrale des Etats de l!Afrique de 1'Oueat

Banque Centrale des Etats de I1 Afrique Equatoriale et du Cameroun

National Bank of Ethiopia The Gambia Currency Board Bank of Ghana

Banque de la Republique de Guinee Central Bank of Kenya

Bank of Libya

Institut d'Emissions Halgache Reserve Bank of Malawi

Banque de la Republique du Mali Central Bank of Mauritius

Banque du llaroe

Central Banks of Nigeria Banque Centrale d'Egypte Banque Nationale du Rwanda Bank of Sierra Leone

National Bank of Somalia Bank of Sudan

Bank of Tanzania

Banque Centrale de Tunisie Bank of Uganda

Bank of Zambia