Insurance practitioners in West Africa have observed that the accelerated integration of the sub-region through the removal of trade barriers, coupled with the trail-blazing free movements of goods, services and people, will boost the capacity for effective competition.
The private BusinessDay newspaper reported Monday that the practitioners made this observation during the West African Insurance Companies Association (WAICA) Conference in Nigeria’s commercial capital of Lagos.
They noted that it was critical for the insurance industry, like other sectors in the sub-region, to begin to build capacity in line with the Economic Community of West African States (ECOWAS) project of integration in the region.
“At a time of rapid and positive economic change in Africa, financial integration has emerged as an increasingly important factor that can help lift the region to the next stage of development,” WAICA Chief Executive Officer Abiola Ekundayo was quoted as saying.
Mr. Ekundayo, who spoke on “Insurance Growth in West Africa and the Benefits of Integration”, said areas that must be concentrated upon to achieve integration include collaboration among insurance regulators and the expansion of the operations of WAICA to serve as a strong sub-regional reinsurance company.
Others include the opening up of insurance markets in member nations such that regional insurance companies can be established to benefit from cost savings due to economies of scale, as the case in the French speaking countries, harmonisation of insurance regulation in West African States and the promotion of cross learning and knowledge codification.
For his part, the Director General of the Ghana-based West African Monetary Institute, Mr. Abwaku Englama, described regional financial integration as an important means of developing local financial markets, through peer pressure, to strengthen institutions and upgrade local practices.
“Enhanced co-operation among various stakeholders including regulatory authorities is also important for ensuring effective integration. As international experience suggests, integration of the insurance sector in a monetary union must be pursued consciously and conscientiously with clear time lines outlined for the various components of the integration efforts,” he said.