By Theresa Igata

West African countries have been warned against dependence on primary commodity exports which has grave implications for their long term macroeconomic stability and their ability to withstand future economic shocks.

Such shocks are likely to come from changes in technology (which are going to cause increases in structural unemployment in the region in years ahead), according to Teslim Shitta-Bey, Managing Consultant, Grant Alsthom Consulting.

Reports have also shown that West African countries of Ghana, Nigeria, The Gambia, Liberia, Sierra Leone and Togo are facing similar challenges with regard to economic growth, development and economic realities; a growing concern however is that economic growth in the sub-region does not translate into development, as unemployment and inequality are still on the rise- while institutional, regulatory and infrastructural constraints within the sub-region have also been identified as critical challenges  to economic integration.

Following these concerns, the West African Institute for Financial and Economic Management, WAIFEM, in collaboration with the Centre for Financial Journalism with support funding from the Africa Capacity Building Foundation, ACBF, organized a strategic workshop on money market reporting for financial analysts across the sub-region with expose on the world and sub-regional economy, market trends and monetary policy.

Addressing participants at the workshop, Teslim Shitta-Bey, disclosed that though the economies of countries in West Africa vary markedly but share a common thread in the extent to which they are all dependent on primary commodity exports.

“Advances in economies of resource use (which will lead to lower labour input with larger product or service output) and growth in Artificial Intelligence (AI) applications will conspire to reduce the marginal product of labour relative to capital and force wages down as return on capital increases. Primary commodity economies may suffer labour surplus and declining earnings that could hurt them badly if they do not begin to emphasize processing over raw material output and export”, he warned.

Technology, fraud and money market regulation

However, with the trends in money market, CEO of Centre for Financial Journalism, CFJ, Mr. Ray Echebiri cautioned on the need for increased security in the financial system, especially with the emerging technology and payments system.

According to him, financial fraud is on the rise and ATM fraud has grown from a virus to a full-fledged epidemic across the globe. Findings by Financial Fraud Action UK have shown that more than 1 million incidents of financial fraud occurred in the first months of 2016 while NDIC report indicates that losses arising from fraudulent cases in the Nigerian banking industry increased 56.3 per cent from 16,275 in 2016 to 26,132 in 2017.

In the money market, there are trends impacting the future of payments. These include growing impact of generation-Z, customs experience, acceptance of mobile payments, restructured rewards, expanded payment network and Fintech collaboration.

Under customers experience, analysis of date provides foundation for an improved customer experience in all industries, especially banking and payments. On the acceptance of mobile payments, the younger consumers are demanding exceptional digital payments. For restructured rewards, consumers want simplicity in earning rewards and simple ways to redeem the rewards. On expanded payments network, the collaboration between financial institutions and non-financial organisations hold the key to the payments ecosystem, as well as improvement payments experience.

For Prof. of Economics at the University of Benin, Anthony Monye-Emina, the aims of money market is to enable Central Banks to undertake vigorous monetary policy, providing a means for the Central Banks to judge shortage or surplus of funds in the economy and paving the way for monetary autonomy of a nation as an independent modern state.

The money market of every country is very important because it performs the functions of financing trade/industry and promoting profitable investments to enhance economic growth”.

Policy and economic development

There is however a meeting of minds amongst governments and policy makers that it is now more difficult for one economy to insulate itself from the backwash effects or consequences of global economic developments, according to Prof. Christopher Orubu, of Delta State University.

“For this reason, policy makers must understand the global economy and factor their knowledge of what is happening in the international economy into the policy making process. In this way, the home economy is able to identify possible economic threats in a proactive manner and develop appropriate response strategies and take advantage of opportunities in order to foster growth and development”.

Speaking earlier in his opening remark, Prof. Akpan H. Ekpo of the West African Institute for Financial and Economic Management, WAIFEM, expressed his appreciation to the sponsoring institution; The African Capacity Building Foundation (ACBF). He noted that the workshop was designed to help participants improve their knowledge of the money market to enable them analyse and report the market more accurately and effectively. He further encouraged participants to avail themselves of the French Language Certificate and Diploma programmes of WAIFEM to enhance communications amongst the member-nations of the West African Sub-region.