Week 5
International Economic Organization
-Historical development of these organizations; ECOWAS, ECA, IMF, IBRD, ADB, OPEC, WACH, GATT, UNCTAD.
- Aims, objectives and roles of the organizations.
An international economic organization may be defined as the coming together of different countries with a
common economic interest and goals, with a view to promoting economic co-operation and development
among member states, to protect and promote the economic and business interest of members, and to
stimulate the socio-economic and cultural development among their members.
ECONOMIC COMMUNITY OF WEST AFRICAN STATES (ECOWAS)
Formation: The Economic Community of West African States (ECOWÁS) was founded on 28th May, 1975 in
Lagos, Nigeria. It comprises all the 15 independent nations of West Africa.
Abuja is the administrative headquarters of the community and Lome, the fund headquarters.
Nigeria, under the leadership of General Yakubu Gowon and Togo under President Eyadema, initiated the
formation of the sub-regional economic grouping. Nigeria, Ghana, The Gambia, Sierra Leone and Liberia are
the English-speaking or Anglophone countries.
Senegal, Guinea, Togo, Mali, Benin Republic, Burkina Faso, Cote d'Ivoire and Niger Republic are French-
speaking or Francophone countries while Cape Verde and Guinea Bissau are Busophone or Portuguese-
speaking countries.
Aims and Objectives of ECOWAS
1. Co-operation and development: One of the aims of ECOWAS is to promote co-operation and
development in all fields of economic activity, e.g. transport, energy, agriculture and telecommunication
among the members states making up the organisation.
2. Trade liberalisation: Another major aim of ECOWAS treaty was the establishment of a common
market with the aim of liberalising trade within the region.
3. To ensure economic stability: The organisation to increase and maintain economic stability within the
community.
4. To abolish trade barriers and restrictions: One of the aims of ECOWAS as an economic body is to
abolish trade barriers among the member nations.
5. To foster closer relations: This could be achieved by encouraging free movement of citizens, goods
and services.
Roles Of ECOWAS
ECOWAS (Economic Community of West African States) plays several vital roles in promoting regional
cooperation and development. Here are five key roles:
1. Promoting Economic Integration: ECOWAS works to create a single regional market by reducing trade
barriers, harmonizing policies, and promoting the free movement of goods, services, and people across West
Africa.
2. Conflict Resolution and Peacekeeping: ECOWAS has been instrumental in resolving regional conflicts
and maintaining peace through diplomatic efforts and peacekeeping missions, such as in Liberia, Sierra Leone,
and Côte d'Ivoire.
3. Facilitating Political Stability: ECOWAS promotes democratic governance by encouraging member
states to uphold democratic principles, human rights, and the rule of law, and it intervenes in cases of
unconstitutional changes of government.
4. Promoting Infrastructure Development: The organization works to enhance regional infrastructure,
including transport, energy, and communications, to facilitate economic growth and integration.
5. Coordinating Regional Health and Education Initiatives: ECOWAS coordinates regional efforts to
improve public health, education, and social services, addressing common challenges like disease outbreaks
and educational disparities.
These roles contribute to the broader objectives of fostering regional integration and sustainable
development across West Africa.
INTERNATIONAL MONETARY
FUND (IMF)
Formation: The International Monetary Fund
(MF) was set up after the Second World War, in order to encourage the development of foreign trade. It
began operation in 1947 with headquarters in the United States of America.
The IMF was established as a result of proposals adopted at an international conference held at Bretton
Woods in 1945. At present, it has about 188 member countries. South Sudan is currently the youngest
country to join IMF in April, 2012.
IMF was established to encourage balance of payments equilibrium and to stabilize exchange rate among
member-countries.
Objectives and Functions of IMF
To establish and stabilize exchange rate among member nations.
To make fund available to members to finance balance of payments deficit.
To make recommendations to members concerning economic policies to be adopted.
To encourage the development of international trade.
To promote co-operation among member countries on financial matters.
To facilitate settlement of debts in foreign transactions.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (IBRD)
Formation: The International Bank for Reconstruction and Development (IBRD), popularly known as World
Bank, was established in 1944 at the same time with the IMF at Betton Woods. Its headquarters is in
Washington, United States of America. Its capital was subscribed by members of the IMF on a quota basis;
thus, membership was restricted to the IMF member countries alone.
The World Bank started with 45 members at the beginning and as at 2020, membership had risen to 189
nations.
Objectives and Functions of IBRD
(1) Granting long-term loans for infrastructural development.
(2) Giving expert advice on development problems.
(3) Provision of experts to solve development problems.
(4) Provision of training experts.
Undertaking feasibility studies relating to economic development.
(5) Making available the experience of other countries.
AFRICAN DEVELOPMENT
BANK (ADB)
Formation: African Development Bank (ADB) was established in 1964 with its headquarters in Abidjan, Cote
d'Ivoire. It is a bank owned by African countries, which belonged to Organisation of African Unity (O.A.U),
now African Union. The AfDB was jointly set up by the effort of the OAU and Economic Commission for Africa
(ECA). It started full operations in 1966, with initial membership of 23 African countries and as at 2020 when
the last check was made membership had risen to 80.
Objectives and Functions of ADB
(1) Provision of loans to aid social and economic development of member nations.
(2) Provision of technical assistance for development projects and programmes embarked upon by
member nations
(3) Promotion of both private and public investment in projects which contribute to the economic and
social development of member states.
(4) It fosters economic integration among member nations
(5) Provision of fund for the supply and development of infrastructural facilities such as electricity, water,
transport and telecommunications.
WEST AFRICAN CLEARING HOUSE (WACH)
Formation: The West African Clearing House
(WACH) was established in June, 1975 with its headquarters in Freetown, Sierra Leone. It has English and
French as the official working languages. WACH is a multi-lateral clearing house which comprises 15 - member
central banks of West African states of Nigeria, Republic of Benin, Cote d'Ivoire, Niger, Senegal, Togo, Burkina
Faso, The Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Mauritania and Sierra Leone.
Objectives and Functions of WACH
(1) To promote the use of members' national currencies for intra-sub-regional transactions.
(2) To bring about savings in the use of foreign reserves.
(3) To promote monetary co-operation in the sub-region.
(4) To encourage trade liberalisation.
