Chapter

III Institutional Arrangements in the Member Countries of the Community

Author(s):
Saleh Nsouli, John McLenaghan, and Klaus-Walter Riechel
Published Date:
August 1982
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Basic Data and Economic Policy Environment

The scope for economic integration, and the optimal path toward it, are determined to an important extent by the relative size of the economies involved and, even more so, by the countries’ economic policies and their use of alternative policy instruments. This chapter examines these requirements as they relate to the Economic Community of West African States.

Table 3 presents comparative economic statistics on the size of the member countries of the Community and their external positions. Important differences are found in terms of population, physical size, and overall and per capita income—differences that not only relate to the overall structure of demand but also to export potential and the structure of foreign trade.

Table 3.ECOWAS: Comparative Basic Data
Country1978

Population

(In millions)
Area

(In thousand

square kilometers)
1978

Gross National Product
Balance of Payments 1
Current accountOverall

balance

(In millions of SDRs)
Gross

official

reserves (In months of imports)
Total

(In millions of

U.S. dollars)
Per Capita

(In U.S.

dollars)
(In millions

of SDRs)
(As percentage

of

GDP)*
Benin3.3113759230-58.4-9.9-9.61.1
Cape Verde0.3478260-6.2-2.07.8
Gambia, The30.611108180-93.9-31.5-28.21.2
Ghana11.02394,290390-38.5-0.1-88.54.4
Guinea5.12461,071210-148.0-7.9-101.51.2
Guinea-Bissau30.936153170-40.8-4.53.3
Ivory Coast7.83226,552840-756.3-7.9-200.01.1
Liberia1.7111782460-103.8-12.5-25.20.6
Mali6.31,241756120-59.5-4.8-7.40.5
Mauritania1.51,031405270-179.0-46.9-27.03.2
Niger5.01,2671,100220-40.4-2.813.65.8
Nigeria80.692445,136560149.0-4.31,207.02.3
Senegal5.41961,836340-239.8-10.2-94.20.2
Sierra Leone3.372693210-87.0-13.3-32.21.4
Togo2.456768320-197.5-17.1-18.12.1
Upper Volta5.6274896160-64.89.0-28.01.7
Total140.86,14365,3834644
Sources: World Bank, World Development Report, 1980; and Fund staff estimates.

Data represent 1977 figures for Guinea-Bissau and Niger; 1978 figures for Benin, Cape Verde, The Gambia, Ghana, Guinea, Liberia, Mali, Mauritania, Togo, and Upper Volta; and 1979 figures for Ivory Coast, Nigeria, Senegal, and Sierra Leone.

Average of 1977-79 figures.

Data on population and GNP represent 1979 figures.

Weighted average. Arithmetic average is 309.

Sources: World Bank, World Development Report, 1980; and Fund staff estimates.

Data represent 1977 figures for Guinea-Bissau and Niger; 1978 figures for Benin, Cape Verde, The Gambia, Ghana, Guinea, Liberia, Mali, Mauritania, Togo, and Upper Volta; and 1979 figures for Ivory Coast, Nigeria, Senegal, and Sierra Leone.

Average of 1977-79 figures.

Data on population and GNP represent 1979 figures.

Weighted average. Arithmetic average is 309.

The balance of payments data shown in Table 3 indicate that almost all member countries of the Community have experienced serious payments difficulties in recent years. The payments problems of these countries are reflected in the relatively low ratios of reserves to imports in the last column of Table 3.

General Orientation of Economic Policy

Significant differences among member countries of the Community are found not only in the relative size, but also in the overall approach to economic policy and in the use of policy instruments, notably those for monetary policy. While all members of the Community have some form of development planning, the degree of official intervention in the economic process differs appreciably from country to country. Generally, three approaches to planning exist in the Community. The first involves comprehensive planning of the entire economy, in some cases extending to individual enterprises. This approach is often accompanied by public ownership of the major firms in industry, commerce, and finance, as well as by the predominance of cooperative agricultural production over private production. Countries that appear to fall in this category of comprehensive planning are Benin, Cape Verde, Guinea, and Guinea-Bissau, whose economic policy generally involves a rather heavy reliance on official intervention, notably by price controls. This is also the case in Ghana where, however, planning is less comprehensive and public ownership is less prevalent.

A second group of countries also relies heavily on overall economic planning, but these countries confine themselves largely to macroeconomic planning. Moreover, only strategic enterprises, such as power companies and major productive firms, are partly or fully owned by the government. Moreover, price controls are the exception rather than the rule. Countries belonging to this group are primarily the member countries (except Benin) of the West African Monetary Union, as well as two other French-speaking member countries of the Community (Mali and Mauritania). Their approach to economic planning in many respects resembles the French system of “planification.”

Countries in a third group rely to a large extent on the operation of market forces and private initiative, although public ownership of selected enterprises is not excluded. The reliance on market forces does not imply that development planning and price controls are completely absent. Planning is concentrated primarily on public sector expenditures and on moderate fiscal incentives aimed at influencing the structure of private sector investment and production, while price controls are often limited to strategic commodities and are in some cases applied to certain phases of the business cycle only. Countries in this category are The Gambia, Liberia, Nigeria, and Sierra Leone.

Monetary Policy

The different approaches to economic policymaking described above are reflected in different uses of, and reliance on, economic policy instruments, notably those for monetary policy. Generally, countries with a nonmarket approach to planning rely fully on quantitative control mechanisms, such as overall and sectoral credit ceilings. The former are applied primarily as stabilization and balance of payments instruments, while the latter aim at development through their effect on the allocation of financial resources available for investment. By contrast, pricing mechanisms in monetary policy, such as the use of variable deposit rates and frequent adjustments in the cost of credit, are very rarely employed in these countries. Both deposit rates and lending rates are generally fixed as absolute values, with no margin, and cannot be changed by individual financial institutions. Charges and commissions of banks are also largely fixed by the monetary authorities.

The member countries of the West African Monetary Union form a special subgroup within the Community and have a common currency, the CFA franc, which is issued by a common central bank, the Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO) with headquarters in Dakar, Senegal. The BCEAO has regional offices in all member countries of the Union. The common currency is accompanied by relative conformity in the financial system in these countries, as well as in the design and use of monetary policy instruments. The broad objectives of the Union’s monetary policy are first formulated by the Council of Ministers, and within the framework of these objectives, the Executive Board of the BCEAO defines the exact assignment and use of various monetary policy instruments in the Union. Monetary policy encompasses the control of overall liquidity in the economies of the member countries. Three factors determine the amount of liquidity injected into the system: (1) estimated overall economic activity; (2) expected developments in the balance of payments; and (3) the desired amount of foreign exchange holdings of the monetary authority. The most important instruments of liquidity control are overall and sectoral credit ceilings. Although the overall credit limit for each member country of the Union is established by the Executive Board of the BCEAO, the allocation of this credit to the government, the treasury, and the financial institutions of each member country, as well as the allocation by sector and purpose, is left to the respective National Credit Committees. The statutes also provide for control of overall liquidity through adjustments in required reserve ratios. In addition to strictly quantitative controls in the form of maximum levels of credit and its allocation, the BCEAO also makes use of pricing mechanisms to influence the level of liquidity and its allocation. These mechanisms include, in particular, normal and preferential rediscount rates and adjustments in deposit and lending rates. Interest rates in the official money markets within the Union are influenced by market forces, although the BCEAO intervenes frequently to stabilize these rates so that they compare with foreign rates.

On balance, therefore, the monetary policy of the Union may be said to consist of an intricate system of credit controls, which are used to achieve an appropriate balance between the objectives of economic stability, balance of payments equilibrium, and balanced economic development. It thus responds rather flexibly to the demand for credit and allows substantial freedom for the working of market forces.

Although not a member of the Union, Mali has a similar approach to the design of monetary policy. Mali has taken some steps to align its monetary policy with that of the Union. Mauritania in many respects also follows an approach to monetary policy similar to that of the Union. In addition to implementing credit controls, Mauritania often makes use of changes in the liquidity ratios imposed on commercial banks for control of domestic liquidity.

Among other member countries of the Community, Ghana places heavy emphasis on quantitative controls, such as overall and selective credit ceilings, although these controls are less formal than those in the Union and less comprehensive than those in the less market-oriented countries of the Community. Credit controls in Ghana focus on bank credit to the private sector and do not usually cover the public sector. Apart from the use of quantitative controls, the Bank of Ghana operates through moral suasion or, where this is ineffectual, by outright interdiction of certain banking operations. Interest rates have been sparingly used as an instrument of policy. Changes in required reserve ratios have also been applied by the Bank of Ghana. These ratios are, however, not generally used to control money supply but to assure the liquidity of the banking system. Control of the money supply has more frequently relied on special deposits by banks to be held with the central bank.

The remaining countries of the Community (The Gambia, Liberia, Nigeria, and Sierra Leone) have largely relied on traditional monetary policy instruments, which are primarily used for the control of the overall supply of money rather than for a specific allocative function. Of these countries, Nigeria has probably leaned most heavily on the use of overall and sectoral credit ceilings and guidelines, while The Gambia and Liberia traditionally have not applied them. Sierra Leone has used them infrequently. The monetary authorities in The Gambia and Liberia have given priority to reserve requirements and discount and advances policies for the control of overall liquidity. Interest rate policy has also been applied actively in these two countries, as well as in Nigeria, but it is less frequently used in Sierra Leone, where monetary policy relies more often on the imposition of liquidity ratios. Nigeria has also depended on special deposits and on the compulsory purchase by banks of stabilization securities for the control of domestic liquidity.

It is clear that the approaches vary greatly within the Community in regard to the use of monetary policy instruments. Equally, it is obvious that the differences in policy environment have an important bearing on the expectations of economic agents in the member countries of the Community, influencing both the direction and strength of their responses as well as the speed of adjustment.

Fiscal Policy

Table 4 indicates broad approaches to fiscal policy by the member countries of the Community, reporting governments’ current domestic revenue (tax revenue and nontax revenue), government expenditure (current and capital), and the method of financing governments’ deficits. The data show important differences among member countries in these areas of fiscal policy. For example, the reliance on nontax income as a source of government revenue ranges between 41 per cent (in Guinea) and 3 per cent (in Senegal). The share of capital expenditure in total government expenditure is as high as 63 per cent in Nigeria but as low as 6 per cent in Mali. Finally, important differences are found in the financing of fiscal deficits. While some countries rely heavily on foreign sources of finance, others depend mainly on the domestic banking system, primarily the central bank. These differences have important consequences for the relative balance of payments position, for the degree of domestic money creation and thus inflation, and ultimately for the prospects for economic growth. The large divergences in approaches to fiscal policy have without doubt contributed to the differences in payments positions of member countries and have thus greatly influenced the effective convertibility of currencies in the region.

Table 4.ECOWAS: Government Revenue, Expenditure, and Deficit Finance 1(In per cent)
Percentage

Shares in Financing

the Fiscal Deficit
Government Current

Domestic Revenue
Government

Expenditure
Domestic
TaxNontaxCurrentCapitalForeignBankingOther
Benin9465347319—29677
Cape Verde821878220
Gambia, The6733475377230
Ghana9010802047719
Guinea59415446—11010
Guinea-Bissau613975257924—3
Ivory Coast67335446114—228
Liberia89114456433720
Mali937946542323
Mauritania653592895—611
Niger83176832137—37
Nigeria74263763561331
Senegal9738812—8511075
Sierra Leone928564451463
Togo9645446152560
Upper Volta891187130247—147
Source: Fund staff estimates.

Data represent 1978 figures for Benin, Cape Verde, Guinea, Guinea-Bissau, Ivory Coast, Mali, Mauritania, Togo, and Upper Volta; and 1977/78 figures for The Gambia, Ghana, Liberia, Niger, Nigeria, Senegal, and Sierra Leone.

Source: Fund staff estimates.

Data represent 1978 figures for Benin, Cape Verde, Guinea, Guinea-Bissau, Ivory Coast, Mali, Mauritania, Togo, and Upper Volta; and 1977/78 figures for The Gambia, Ghana, Liberia, Niger, Nigeria, Senegal, and Sierra Leone.

Financial Sector Size and Claims on Government

The size of central banks’ assets relative to those of deposit money banks is an indication of the decentralization of financial intermediation and its delegation to individual financial institutions that have direct contact with savers and investors. Table 5 shows important differences in the relative size of these assets among member countries. Column 3 of Table 5 indicates that the division of labor and decentralization in the financial system are most advanced in Ivory Coast and Senegal, each having a coefficient of central bank assets to deposit money bank assets of 0.30. At the other extreme are countries like Ghana and Sieria Leone, with coefficients of 1.59 and 1.38, respectively, where the central bank clearly dominates financial sector activities. In Cape Verde and Guinea-Bissau, the central bank is also the only deposit money bank. Column 4 indicates that the relative size of the central bank is more often than not correlated with the importance of its claims on the government as a proportion of total assets. The greater the government’s reliance on the central bank for financing the fiscal deficit, the larger is the relative size of the central bank.

Table 5.ECOWAS: Relative Size of the Central Bank and Importance of Its Net Claims on Government 1(In millions of national currency units and per cent)
Central Banks’

Net Claims on Government
AssetsAs percentage

of central

bank assets

(4)
As percentage

of financial

system’s net

claims on

government

(5)
Central

bank

(1)
Deposit

money

banks

(2)
(3)

=

(1)/(2)
Benin21,800.052,000.00.4216100
Cape Verde2,100.025100
Gambia, The95.5104,880.00.914189
Ghana5,303.23,338.91.597986
Guinea12,043.013,261.00.915363
Guinea-Bissaul,329.0284100
Ivory Coast237,600.0790,100.00.30—9—64
Liberia95.1228.10.427495
Mali198,300.0159,400.01.245098
Mauritania8,863.08,672.01.021899
Niger40,300.073,800.00.55—1850
Nigeria5,454.36,986.90.784561
Senegal92,300.0263,300.00.30396
Sierra Leone282.9204.71.387077
Togo34,500.072,900.00.473276
Upper Volta20,300.063,600.00.32—2774
Sources: IMF, International Financial Statistics; and Fund staff estimates.

Data represent September 1979 figures for Benin, Ivory Coast, Liberia, Niger, Nigeria, Senegal, Togo, and Upper Volta; December 1979 figures for Cape Verde, Guinea, and Guinea-Bissau; and December 1978 figures for The Gambia, Ghana, Mali, Mauritania, and Sierra Leone.

Estimates. The central bank is also the deposit money bank.

Combined net claims on government and state enterprises.

Sources: IMF, International Financial Statistics; and Fund staff estimates.

Data represent September 1979 figures for Benin, Ivory Coast, Liberia, Niger, Nigeria, Senegal, Togo, and Upper Volta; December 1979 figures for Cape Verde, Guinea, and Guinea-Bissau; and December 1978 figures for The Gambia, Ghana, Mali, Mauritania, and Sierra Leone.

Estimates. The central bank is also the deposit money bank.

Combined net claims on government and state enterprises.

Another indicator of the diversity of the financial systems of the Community is the percentage of central banks’ net claims on government as a percentage of the financial system’s total net claims on government. In the two countries where there is only one combined central and commercial bank (Cape Verde and Guinea-Bissau), the financial system is essentially formed by this bank alone and the net claims amount to 100 per cent.13 In all other countries the government’s domestic credit needs are also partly satisfied by deposit money banks. Column 5 of Table 5 indicates that in the majority of the member countries the central bank meets more than half of the domestic credit needs of the government.

Money and Capital Markets

As might be expected in countries at the present stage of development of the member countries of the Community, formal money and capital markets either do not exist or are at a relatively early stage. Official money markets are found only in the member countries of the West African Monetary Union and in Nigeria. Money markets in the Union are organized by the central bank and function at two levels—first, at the level of the principal agencies of the BCEAO in each country, and second, at the level of the Union as a whole (i.e., at the BCEAO headquarters). Operations cover day-to-day transactions and term transactions of one month’s and three months’ duration. Interest rates generally follow those in foreign markets, notably in France. Money market operations take place in each of the member countries of the Union but are clearly concentrated in Ivory Coast and Senegal.

An institutionalized money market has been operating in Nigeria for only a few years. Previously, banks traded overnight and term money in informal interbank operations. Informal money markets are found in The Gambia, Ghana, Liberia, and Sierra Leone, where some interbank lending operations on a term basis take place between banks. Also, the central banks in these countries generally stand ready to supply liquidity on a short-term basis in case of shortages, and they occasionally trade in short-term treasury bills or similar government paper. No formal or informal money market arrangements are found in the remaining member countries of the Community.

Stock exchange facilities exist only in Nigeria and Ivory Coast. In Nigeria the stock exchange has a history of almost 20 years. Since the early 1970s, and particularly after the oil boom, activity has accelerated because the stock exchange benefited from the high rates of return on shares, which compared favorably with rates on other financial assets. Activity on the stock exchange of the Ivory Coast has expanded appreciably since its establishment in April 1976. Transactions on the Abidjan stock exchange cover the initial offering of bonds and shares, as well as secondary market activities in these assets. In Ghana the National Trust Holding Company performs some functions of a stockbroker and dealer, but no formal arrangements have yet emerged.

Exchange and Trade Arrangements

The restrictiveness of a country’s exchange system is the most important indicator of the degree of currency convertibility permitted by the national authorities. The Appendix to this paper describes the exchange systems of the member countries of the Community and explains their restrictions on foreign exchange transactions. An analysis of the exchange systems shows great differences among the individual countries in the scope and stringency of exchange controls and restrictions. At the one extreme is Ghana, where essentially all foreign exchange transactions, both current and capital, are subject to controls by the monetary authority, where large payments arrears exist, and where most foreign exchange transactions are subject to quantitative restrictions. A detailed foreign exchange budget is prepared annually and is revised throughout the year as new information becomes available. Only most urgently needed imports are accorded a high priority and are assured of the availability of foreign exchange; the importation of all other goods is subject to at least occasional quantitative restrictions or delays in the allocation of foreign exchange. Exchange controls and restrictions in Guinea and Guinea-Bissau, although not as stringent as those in Ghana, are nevertheless comprehensive. Both countries also incur payments arrears. The tight exchange controls and the prevalence of exchange restrictions in all three countries, as well as in Sierra Leone and Mauritania, which also have payments arrears, are evidence of the inconvertibility of the currencies of these countries.

The Gambia, the Operations Account countries within the Community (that is, the member countries of the Union and Mali), and Liberia maintain more liberal exchange systems and have a higher degree of currency convertibility than Ghana, Guinea-Bissau, Mauritania, and Sierra Leone. While the Gambian dalasi cannot yet be considered convertible de facto, the exchange system of The Gambia is relatively free of exchange controls and restrictions. The convertibility into the French franc of the currencies of the Operations Account countries within the Community—the CFA franc and the Mali franc—is assured by France under an agreement between France and these countries. The guarantee holds, however, only within the limits of the Operations Account and is linked to the meeting of certain policy requirements agreed upon between these countries and France. The system of exchange controls and restrictions in these countries typifies a formally convertible currency system, at least in regard to current and capital transactions with France, Monaco, and the Operations Account countries. However, exchange controls apply to transactions with other countries.

At the other extreme of the spectrum is Liberia. Since the U.S. dollar, a fully convertible currency, is legal tender in Liberia, the Liberian dollar is fully convertible, although Liberia has not accepted the obligations of Article VIII of the Fund’s Articles of Agreement. Liberia’s exchange system is clearly the most liberal in the Community.

Tariff Liberalization

The ECOWAS Treaty, which was signed in Lagos on May 28, 1975, states the purposes of the Community. Article 2 stipulates in subsection 2:

  • … the Community shall by stages ensure:

  • the elimination as between the Member States of customs duties and other charges of equivalent effect in respect of the importation and exportation of goods;

  • the abolition of quantitative and administrative restrictions on trade among Member States;

  • the establishment of a common customs tariff and a common commercial policy toward third countries; …

In the Treaty’s Chapter III on Customs and Trade Matters, these general purposes are explained in detail. Article 12 calls for the progressive establishment of a customs union among the member states, together with a common customs tariff in respect of all goods imported from third countries. Article 13 presents a phased program for the elimination of internal customs duties and similar charges on products originating from member states, as well as for the elimination of quantitative restrictions on “Community goods,” as defined by Article 18. Article 13, Section 2, envisages a duty standstill period of two years after the entry into force of the Treaty, during which member states would be expected to abstain from imposing any new duties or raising existing ones but would not be required to reduce or eliminate any duties. Upon the expiration of this two-year period, member states would be expected progressively to reduce and ultimately to eliminate all intra-Community import duties within an eight-year period. Article 14 envisages the establishment of a common external tariff over a further period of five years, following the initial ten-year period, during which internal tariffs would be eliminated.

The program of trade liberalization set forth in Chapter III of the Treaty is rather ambitious, given the marked differences in the importance and structure of tariffs and quantitative restrictions among the member countries of the Community before the entry into force of the Treaty. Table 6 indicates the importance of customs duties in member countries as a share in their foreign trade and in gross domestic product (GDP), as well as in total government revenue. Average customs duties levied on trade are very low in Mauritania and Liberia, as shown by the shares of 3.9 per cent and 4.3 per cent of customs receipts in total trade. By contrast, the shares reach the highest levels of 21.7 per cent and 17.2 per cent in Upper Volta and Benin, respectively, while the average level for all other countries is 11.0 per cent.

Table 6.ECOWAS: Reliance on Indirect Taxation 1(In per cent)
Share of Customs Receipts
In foreign trade
In GDPImport duties: total importsExport duties: total exportsCustoms receipts: total tradeShare of Indirect Taxes in Total

Government Receipts
CountryTotal customs receiptsImport dutiesExport dutiesIndirect taxes2Customs receiptsImport dutiesExport duties
Benin6.817.269.148.8
Cape Verde2.132.1313.337.537.430.13
Gambia, The9.68.61.025.44.417.066.852.647.35.3
Ghana4.71.92.811.512.712.264.826.610.516.1
Guinea
Guinea-Bissau27.7
Ivory Coast47.54.13.414.810.012.278.135.319.415.9
Liberia4.74.40.310.80.54.344.520.418.91.5
Mali43.37.565.725.4
Mauritania3.63.40.28.70.33.962.228.126.81.3
Niger2.21.40.87.55.76.757.416.310.55.8
Nigeria3.13.122.37.932.919.719.50.2
Senegal6.245.141.1414.76.011.785.630.3424.845.54
Sierra Leone45.54.60.917.24.111.258.837.030.96.1
Togo44.12.91.212.07.910.468.128.120.08.1
Upper Volta5.25.00.224.14.521.767.947.245.02.2
Sources: United Nations, Statistical and Economic Information Bulletin for Africa, No. 9, Document No. E/CN.14/SEIB.9; IMF, International Financial Statistics; table adapted from Table 1 of Preliminary Report on Trade Liberalization Options and Issues for the Economic Community of West African States (United Nations Conference on Trade and Development and United Nations Technical Cooperation for Development, January 1979).

Most of the data are for 1973.

Excluding grants and loans.

Data for 1972.

Estimates.

Sources: United Nations, Statistical and Economic Information Bulletin for Africa, No. 9, Document No. E/CN.14/SEIB.9; IMF, International Financial Statistics; table adapted from Table 1 of Preliminary Report on Trade Liberalization Options and Issues for the Economic Community of West African States (United Nations Conference on Trade and Development and United Nations Technical Cooperation for Development, January 1979).

Most of the data are for 1973.

Excluding grants and loans.

Data for 1972.

Estimates.

There are large variations in the degree of dependence of the Community’s member countries on customs duties as a source of government revenue. In The Gambia more than 50 per cent of total government revenue in 1973 originated from customs duties. While the total was somewhat less in Benin (49 per cent), Upper Volta (47 per cent), Sierra Leone (37 per cent), and Ivory Coast (35 per cent), customs duties nevertheless were a very important source of revenue for these countries. By contrast, the Governments of Cape Verde (8 per cent) and Niger (16 per cent) depended only to a limited extent on trade-related revenue. Obviously, the elimination of intra-Community tariffs and any leveling of external tariffs would have significantly different economic implications for these countries and would lead to different measures for implementing the trade liberalization envisaged in the Treaty. This is the case despite the provisions in the Treaty’s Article 25 for compensation for loss of revenue because of tariff liberalization.

Further complications in the move toward a customs union arise from the adherence of the Community’s member countries to other regional organizations or groupings which also aim at an elimination of tariffs on trade and sometimes even call for the granting of preferential terms of trade. Examples of such arrangements are (a) the Treaty of Abidjan (1973), establishing the West African Economic Community, with Ivory Coast, Mali, Mauritania, Niger, Senegal, and Upper Volta as signatories; (b) the Mano River Union (1973), signed by Liberia and Sierra Leone and since October 1980 including Guinea; and (c) the Cape Verde/Guinea-Bissau Free Trade Area (1976). In addition to these formal treaties, a number of bilateral arrangements on trade are still found within the Community.

In view of the important differences in the level and structure of customs duties within the Community and the complication of adherence by a number of countries to more than one regional organization, it is not surprising that the Community’s member countries did not immediately start to implement the phased program envisaged in the Treaty. In fact, the two-year duty standstill period described in Article 13 did not become officially operative until May 1979. However, in May 1980, at a meeting in Lome, Togo, the Conference of ECOWAS Heads of State decided to start the second phase of the program, aiming for an elimination of intra-Community customs duties and quantitative restrictions in May 1981 and aiming for completion of the program by 1989.

In Benin the net claims also amount to 100 per cent, since in 1979 there was no lending by deposit money banks to the Government.

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