Ghana's President Nana Addo Dankwa Akufo-Addo has proposed that 30% of Africa's sovereign reserves held in foreign banks be invested in the continent's own financial institutions. Speaking at a Presidential Dialogue on the African Union's (AU) Financial Institutions during the 37th Ordinary Session of the AU Assembly in Ethiopia, President Akufo-Addo emphasized the importance of strengthening Africa's financial institutions to facilitate the continent's development and growth.
President Akufo-Addo highlighted the need to bolster the capital base of African financial institutions such as the African Development Bank (AfDB) and Afreximbank. He urged African countries to invest a minimum of 30% of their reserves in these institutions to enhance their capacity and increase resources for development.
Citing the negative rates of interest incurred from holding reserves in foreign banks, President Akufo-Addo stressed the importance of increasing the financial power of Africa's own institutions. He emphasized the critical role played by AfDB and Afreximbank in alleviating the impact of the COVID-19 pandemic, urging African leaders to strengthen these institutions to bolster the continent's self-reliance.
Additionally, President Akufo-Addo called for serious consideration of ratifying the decision to make Afreximbank a specialized agency of the AU. He emphasized the need for accountability in the investment of funds into Africa's financial institutions, highlighting the importance of proper monitoring mechanisms.
President Akufo-Addo reiterated his commitment to championing reforms of the global financial architecture, emphasizing the importance of prioritizing African development priorities and stemming illicit financial flows from the continent. He called for collaborative efforts among African leaders to develop a robust global financial system that serves the needs of the continent.
The dialogue also discussed the establishment of an African Monetary Union and the creation of AU financial institutions such as the African Central Bank (ACB), African Monetary Fund (AMF), and African Investment Bank (AIB). As Africa seeks to accelerate its transformation journey, the dialogue underscored the importance of revising legal instruments to expedite the establishment of AU financial institutions and address financing challenges.
The launch of the Alliance of African Multilateral Financial Institutions – the Africa Club – was also announced during the AU session. The Club aims to bring together member institutions to find solutions to financing challenges and support Africa's sustainable economic development and integration objectives.
