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AUF ECONOMIC POLICY FRAMEWORK


Johannesburg Stock Exchange

The African Union's share of world trade is miniscule, less than 2% (compare this with the US share - 15% or the EU - 16.6%). The potential for this share to shrink further can only be addressed by the comprehensive integration of the AU's economy. Intra-African trade is less than 10% of Africa's total trade. The African Union requires a strategic plan for African trade.

Policy for Economic Growth

The Economic Policy Framework is an AUF document of plans designed to resolve the economic problems in Africa. The AUF will put an end to all economic policies that attempt to subordinate the African economy to international financial capital.

Therefore:-
[1] The AUF seeks that all African regions have a common external tariff and a common agricultural policy. The AUF aims for a single government organization for monitoring trade flows, and will collect decentralized and geographically dispersed data and provide uniform organizational information to African trade organizations for immediate attention. The organization's reports will reflect the geographical distribution of trade, services, or capital flows.

[2] The AUF supports monetary stability and is working to move Africa into economic integration and prevent disruptions in trade resulting from fluctuations in currency exchange rates. The AUF seeks the establishment a single currency that is necessary as replacement for the blocked currencies of African countries. Blocked currencies are those currencies whose transfer is restricted and cannot be freely converted to the currencies of other countries nor can they be physically transferred to another country).

[3] Set up structured financing facilities to provide competitive financing in the form of loan insurance and lower interest charges to foreign and domestic buyers of African-built machinery and equipment; supporting reserch and development programs; and securing greater industrial benefits for African companies involved international markets.


Bourse Regionale des Valeurs Mobilieres (Afrique de l'Ouest)
Regional Exchange of Transferable Securities [BRVM] (Western Africa)


The AUF will institute a single bank to manage the national currency reserves of unified African central banks and encourage international acceptance of the single African currency. The single bank would strengthen coordination of monetary policies among African states and study and develop the infrastructure and procedures required for the conduct of a single monetary policy. The AUF would create a mechanism to limit the fluctuation in the bilateral exchange rates against the US dollar to 2.25%. The African Central Bank (Exchange Control Authority) would maintain price stability. It would be independent of national and community authorities.

The single currency would eliminate the need for exchange rates among Africans and would put Africans in a stronger position to maintain parity with non-African currencies.

SUPERVISION OF FOREIGN BANKS

The African Central Bank would have supervisory powers over foreign banks by :-
requiring African Bank review before a foreign bank enters or expands in the unified Africa;
tightening the standards for entry and expansion that must be considered by the African Bank;
requiring African Bank Board approval of African representative offices in foreign banks, and;
requiring that each African office of a foreign bank be examined at least once a year by the African bank.

The AUF will facilitate resources for shortfalls in export earnings or excesses in critical product (e.g., food. Fuel) import costs that are caused by factors beyond a region's control and which are temporary. Contingency financing would help Africans to maintain the momentum of adjustment efforts in the face of a broad range of adverse external shocks, e.g., changes in international interest rates or prices or primary imports or exports.

The AUF will establish an Economic Stabilization Fund - to stabilize the single Africa currency in times of foreign exchange volatility.

[3] The AUF will centralize and standardize patent law and procedure. There must be mutual recognition of tests, test and certification procedures and quality systems within the African private sectors. Patent applicants will have patent protection the unified Africa, and within all of its subdivisions, regions, provinces and districts. The AUF must establish the African Patent Bureau to promote easier, cheaper and more reliable patent protection by establishing a single procedure for granting patents on the basis of a single African patent law. This process would allow for free circulation of government certified products within the unified Africa.

[4] The AUF shall establish and support the African Research Coordination Bureau - that coordinates advanced technology projects carried out by African industry.

[5] The AUF shall organize African trades unions into the African Trades Union Confederation. The ATUC's principal goal would be to influence African policies affecting workers.

[6] The unified Africa will have a head of government with the authority to investigate proposed or pending mergers, acquisitions, and takeovers by or with foreign persons to determine their effects on African unity and security. The head of government will be invested with the authority to suspend and/or block those transactions that lead to control of an African company by a foreign person if the head of government determines that the foreign purchaser might take actions that would threaten the nations unity.

[7] The AUF will curtail Expansionistic Pricing - a radical form of Penetration Pricing- that is a key component of the strategy considered suitable for MNCs doing business in Africa. Expansionistic Pricing differs from Penetration Pricing only in that the price will be even lower in an attempt to secure a larger share of the potential buyers at extremely low prices. Expansionistic Pricing has to stop.

[8] The AUF will establish the Foreign Claims Settlement Bureau within the African Ministry of Justice authorized to determine claims of African nationals for loss of property in specific foreign countries.

[9] The AUF will formulate a general framework of legal, accounting, and regulatory policies and institutions and procedures to assess foreign investment interest, including:-
evaluation of direct investment in Africa in order to guarantee
that any investment has a direct benefit to Africa, such as increased
employment, and
regulation of the movement of foreign capital in Africa.

[10]The AUF will promote and support a unified commercial policy, including a commercial law program designed to develop in Africa, a commercial infrastructure consistent with unification. The Commercial Law Program will compile a Language resource list of African Commercial Law experts with strong language capabilities.

CONCLUSION

The African Union must be a common market having common external tariff, in addition to being a free-trade area, which will allow for labor and capital mobility and common economic policies across the continent. There would be shared standards between regions, for implementing an effective export control system, including licensing and enforcement. Enforcement include marks applied to products, their packaging, or their documentation as a declaration of conformity, third party testing and/or certification, quality assurance audit, and/or full type approval by a body authorized and recognized by the Africa Union.

Standards that require AU certification would apply to products that become subject to AU-wide directives. Before any grain can be imported into the African Union (or exported) it must be certified by the appropriate authorized AU organization as having met a specific standard.

Integration will allow for the development of economies of scope - where by there is reduction in the cost per unit of producing goods through the coordination of two or more manufacturing processes or products.

Integration will allow for coordination of economic efforts to promote balanced economic growth and stability among regions in Africa.

The AUF is working to remove barriers to trade, to foster free movement of labor and capital, and harmonize AU trade, monetary, fiscal and tax policies.




    
    
    
    
    
    
    
    
    
    
    
    

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