Akufo-Addo calls for strong African financial institutions as he opens Afreximbank’s Annual Meeting
The African continent would be unable to achieve its growth objectives unless it had strong development financial institutions, President Nana Addo Dankwa Akufo-Addo of Ghana said today in Accra as he performed the formal opening of the 30th Annual General Meetings of the African Export-Import Bank (Afreximbank).
The Afreximbank Annual Meetings (AAM2023) is also being held to celebrate the 30th anniversary of the establishment of the Bank, which was founded in 1993.
President Akufo-Addo told participants that Africa’s financial development institutions had remained highly undercapitalised, saying those institutions needed to be properly capitalised and to have effective coordination with the African Union (AU) in order to be able to deliver effectively for the continent.
Noting that a bank like the China Exim Bank had a capital of $54 billion while Afreximbank had only $6 billion, he urged African countries and Africans to contribute to Afreximbank’s general capital initiative by subscribing to their allotted shares.
President Akufo-Addo commended Afreximbank for its catalytic role in Africa and urged it to strive to further improve its rating with the credit rating agencies in order to enhance its operations and be able to work consistently for Africa and the African Diaspora.
He pledged to work for Afreximbank to be admitted to a special status at the AU in recognition of its role and contributions to the continent and described AAM2023 as a truly intercontinental event with the participation of several Caribbean countries that had become full members of the Bank following the signing of partnerships agreements with the institution.
The President further welcomed the Bank’s support for Ghana, noting that its first transaction was with the Ghana Cocoa Board and that, beyond that, Afreximbank had provided timely support to Ghana through its Counter-Cyclical Liquidity Facility (COTRAFL) which it had put together at a time when global financial institutions were exiting Africa.
“When dealing with powerful global financial financial institutions, it is important to have your own powerful financial institutions,” said the President.
Earlier, Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, said that the Bank was delivering on the blueprint laid out by the pioneers of the OAU for Africa’s socio-economic transformation.
The pioneers had set priority key goals to establish a free trade area among the various African countries; to establish a Pan-African Payments and Clearing Union; to establish a common external tariff to protect the emergent industries and set up a raw material price stabilisation fund; to develop trade among African countries by the organisation and participation in African trade fairs and exhibitions and by granting transport and transit facilities; and to progressively free national currencies from all non-technical external attachments and the establishment of a Pan-African monetary Zone, he said.
“For sixty years, this well-articulated road mapremained a map and gathered dust,” said President Oramah. “But thanks to the vision of African leaders who founded Afreximbank 30 years ago, one by one, they are being delivered within the framework of ‘Team Africa’, comprising the African Union and its Agencies, the AfCFTA Secretariat and Afreximbank as the underpinning banker”.
“Today, the Pan-African Payment and Settlement System (PAPSS) is up and running, which will save the continent 5 billion US dollars in intra-African transfer changes. It will also expedite and enable payments for intra-African trade in African currencies,” he said. “Very soon, we will domesticate all intra-African payments and extend the same to the CARICOM, where just a few days ago, the Association of CARICOM Central Banks adopted PAPSS as their preferred payment infrastructure for a pilot project. By this singular move, we are one step closer to a full integration of African and CARICOM economies”.
He added that, in response to the founding fathers’ aspiration to develop trade among African States by organising and participating in African trade fairs, Afreximbank, in 2018, worked in partnership with the African Union to introduce biennial Intra-African Trade Fairs (IATF). Afreximbank pre-funded the organisation of the trade fairs, of which two had been held in Cairo and Durban, South Africa, attracting an aggregate of about 40,000 visitors and about 75 billion US dollars in deals.
With the AfCFTA Secretariat joining the partnership following its establishment, the IATF, branded the AfCFTA Marketplace, had become the largest gathering of African businesses and traders, he continued. The third edition would hold in Cairo from 9 to 15 November 2023.
It was also because Africa had Afreximbank that an integrated regional transit guarantee scheme for the continent had been birthed to ease the movement of goods across the 110 borders that divide Africa, said Prof. Oramah. Under the Scheme, goods could move across multiple African borders under one transit bond, significantly reducing border delays and transit costs
