President Nana Addo Dankwa Akufo-Addo has called for the consolidation of Africa’s fragmented financial institutions to finance infrastructure projects, boost trade and support socio-economic development initiatives across Africa.
President Akufo-Addo said the need for innovative financing arrangements, as well as the establishment of African Union financial institutions to support the agenda 2063 is of the utmost necessity.
Speaking at the 6th African Union (AU) Mid-Year Coordination Meeting in Accra on Sunday, President Akufo-Addo said currently, Africa’s financial landscape is scattered with numerous institutions and initiatives operating in silos.
This fragmentation, according to the President, has led to inefficiencies, duplication of efforts and a sub-optimal utilisation of resources.
He called for the consolidation of African Union institutions to provide technical and strategic recommendations as to how this can be done.
Consolidating these institutions, according to him, would create a more cohesive and effective financial framework that would ensure that resources are allocated to where they’re most needed.
Central to the realisation of this vision, President Akufo-Addo emphasised, is the establishment of the three African financial institutions — the African Central Bank, the African Investment Bank, and the African Monetary Fund.
The creation of these institutions, the President indicated, is vital to achieving the financial stability and economic integration necessary for the successful implementation of Agenda 2063.
The African Central Bank, President Akufo-Addo maintained, would also harmonise monetary policies and ensure currency stability across the continent, mitigate the risks associated with exchange rate volatility and create a predictable economic environment that fosters investor confidence and facilitates intra-African trade.
A stable and unified monetary policy, the President averred, would reduce transaction costs and increase the efficiency of our financial systems.
“Concurrently, the African Investment Bank will be instrumental in mobilising and allocating resources for large-scale development projects providing the financial backbone for key infrastructure and development initiatives and accelerating progress towards the highest durations of agenda 2063,” he stressed.
It will catalyze investments in infrastructure technology and human capital, which are fundamental to transforming the socio-economic landscape of Africa.
Additionally, President Akufo-Addo said, the African Monetary Fund would provide financial assistance to member states facing balance of payments issues and economic shocks, boosting monetary cooperation and stability among African nations by reducing Africa’s dependency on external financial institutions and promoting sound fiscal and monetary policies.
The African Monetary Fund will support macroeconomic stability and entrench financial sovereignty across the continent.
“The consolidation of our financial instruments under these institutions will strengthen our position in the global financial system and will enable us to negotiate from a position of strength and unity leveraging our collective resources and capacities to achieve our development goals,” he said.
He said that integrating the continent’s financial systems would not only create a more robust and resilient African economy, “but also improve the quality of life for our people through improved access to essential services and opportunities.”
The Chairperson of the AU, Mohamed Ould Ghazouani, on his part said the Union was working to mobilise about $100 billion to support export-based companies on the continent to increase their production.
He said effective coordination between the AU and the regional economic communities or blocs was a determinant factor for achieving continental integration and aid in attaining the Agenda 2063.
Mr Ghazouani explained that a strong economic integration among African countries would enable the AU to present a stronger voice at the United Nations General Assembly, the International Monetary Fund, G20 nations and the World Bank.
To this end, he said the African Continental Free Trade Area (AfCFTA) had presented a conducive platform for African countries to increase bilateral trade and foster economic integration.
He said the continental body was also expediting efforts to support African nations leverage the use of Artificial Intelligence, energy transformation, and financial reforms among others to improve their economies and fast-track economic growth and integration.
Rex Mainoo Yeboah, ISD
