According to President Nana Addo Dankwa Akufo-Addo, depending on foreign finance is hazardous and expensive; thus, without the continent's own robust financial institutions, progress would remain a mirage.
According to him, the dependence would also result in significant financial leakages due to the high cost of borrowing due to default and interest payments and would hinder the development of the private sector and the mobilisation of domestic resources by African financial institutions via fund costs.
This was said by President Akufo-Addo, who also serves as the African Union's (AU) Champion of Financial Institutions, yesterday in Accra as he launched Afreximbank's 30th anniversary celebration and Annual Meeting.
Over two dozen current and past presidents and prime ministers of Africa and the Caribbean, as well as heads of major financial and other organisations, have been invited to the five-day gathering, which has as its subject "Delivering the Vision, Building Prosperity for Africans."
Ownership
President Akufo-Addo said, "The ownership of our financial institutions should be strengthened over time to enhance continuously their development and relevance," and he suggested some key interventions were crucial to strengthening the development impact and financial capability of such development financial institutions.
He identified two key points: adequate funding and effective coordination with the AU. Regarding funding, he noted that, despite ongoing efforts by many African governments, including in times of extremely challenging macroeconomic conditions in global operating environments, Africa's development finance institutions continued to face challenges.
President Akufo-Addo gave several examples, citing the Japan Bank for International Cooperation as having a share capital of $19 billion, China EXIM as having a capital of $54 billion, and Afreximbank as having a capital of $6 billion, excluding recent contributions from nations supporting the ongoing general capital increase.
He demanded an assessment to ascertain if the $6 billion was enough to play the catalytic function of hastening the development of the market with a potential combined gross domestic product (GDP) of $3.4 trillion for Africa.
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