By Isaac AIDOO and Selorm GBORBIDZI, Accra
PRESIDENT Nana Addo Dankwa Akufo-Addo, has rallied African governments to capitalise African Export-Import Bank (Afreximbank) well beyond its existing size of $6 billion.
The current $6 billion capital of the African Bank is according to the President far from sufficient to “catalyse the creation of a market on a continent whose combined Gross Domestic Product (GDP) is around $3.4 trillion.”
President Nana Akufo-Addo was delivering the keynote address at the 30th Afreximbank Annual Meeting, being hosted by Ghana, in Accra.
“Delivering the Vision, Building the Prosperity for Africans”, is the theme of the landmark meeting.
The three-day programme is being attended by Heads of State, some former Presidents, Ministers of State, captains of industry, economists, financial experts and analysts, among others.
Highlights of the programme, featuring high-profile speakers from the continent as well as the Caribbean, include a meeting of the Advisory Group on Trade Finance and Export Development in Africa, and shareholders of the Afreximbank.
Topics being discussed by the participants include the Implementation of the African Continental Free Trade Area (AfCFTA), Delivering Prosperity through Industrialization and Building Prosperity for Africans: The Challenges of Peace and Security.
Others are: Overcoming the challenges of Food Security for Sustainable Development in Africa, African Arts and Literature in the Empowerment of an African Renaissance, and Delivering the Vision – Corporate Perspectives.
Additionally, some issues relating to boosting science, technology and innovation for shared prosperity in Africa, and unlocking Africa’s trade, investment and commerce opportunities leveraging digital platforms and ecosystems will also be discussed.
President Nana Akufo-Addo admonished those countries with the means to go beyond their allocated shares to contribute more towards the capitalisation of the Bank.
He lamented that the development financing institutions on the continent remain highly undercapitalised, especially when compared to similar organisations in other jurisdictions, such as the Japan Bank for International Cooperation which has about $19 billion in share capital, and the Export-Import Bank of China which has market capital worth about $54 billion.
He averred that the improvement in the levels of engagement of Africa’s financial institutions hinged on better coordination and enhanced accountability.
“It is important to strengthen coordination with these institutions to make sure that they are working consistently for Africa and the African diaspora, supporting the development agenda and the implementation of the national development strategy,” the President stated.
President Nana Akufo-Addo implored managers of the Bank to work towards the development and implementation of an aggressive strategy to upgrade the Bank’s credit rating from BBB to A.
He encouraged the African Union (AU) Commission to expedite the process of admitting the Afreximbank as a specialised agency of the AU, noting that the “Bank will play a very important role in the implementation of the African Continental Free Trade Area.”
This, the President said could only be done through the strengthening of the governance and management structures of the Bank as well as its personnel.
He urged those who have not yet paid their dues to do so, as this is one of the best ways to support the development of the private sector, and increase access to and lower the cost of funds for sustained private investment and economic growth.
President Nana Akufo-Addo argued that if African countries were able to gain control over monies got from the extractive sector and plug the leakages from the extractive sector, the continent would be better placed to finance the Afreximbank.”
“If we are able to gain greater control over the huge earnings that emanate from our extractive sector and plug the hole that permit significant outflows of illicit funds from the continent, we will be in a better position to assemble the monies necessary to strengthen the capital of Afreximbank,” he stated
President Nana Akufo-Addo appealed to countries to remain committed to the treaty and ideals underpinning the establishment of the Bank for a shared prosperity and sustainable growth of the continent, he advised.
President Nana Akufo-Addo pointed out that as the meeting heralded the fulfilment of the bold vision of Afreximbank’s founding pioneers, it was appropriate that stakeholders took the issues at hand seriously.
“It has become urgent to take measures to build a resilient African economy beyond aid,” he noted.
It was imperative to invest in the Afrixembank for the continent’s growth, he emphasised, and appealed to the African Union (AU) Commission to expedite action to making the Bank a special financial institution championing Africa’s growth at all levels.
The dynamics of the global economic trends, especially in the wake of the COVID-19 pandemic and geo-political crises, had reinforced the need for the continent to look within itself in financing its own development agenda.
“Unless we have strong financial institutions, we are not going to be there,” the President stated.
“The continuous growth of Afrixembank and Africa are intertwined.”
He lauded the Management of the continent’s apex Bank for its financial assistance to Ghana and other African countries, following the shocks suffered by those countries in the face of the pandemic.
Afrixembank has disbursed over US$45 billion in the course of the COVID-19 pandemic and Russia/Ukraine crisis.
This has enabled the majority of the countries to weather the combined effects of those setbacks by helping them to honour maturing trade debt payment obligations to pay for critical imports and to pursue strategic investments.
PAPSS to save Africa $5billion in charges
President and Board Chairman of Afreximbank Prof Benedict Oramah revealed that the Pan-African Payment and Settlement System (PAPSS) would save the continent $5 billion in intra-African transfer charges and would also expedite and enable payments for intra-African trade in African currencies.
“It is now possible for a Gambian to buy Nigerian urea fertilisers using Gambian Dalasi to purchase Naira; for a young Ghanian to pay for holidays in Seychelles in Ghanaian Cedi, and for a small farmer in rural Zambia to stream her favourite Nollywood movie paying in Zambian Kwacha.”
Prof Oramah stated further that efforts were underway to l domesticate all intra-African payments and extend the same to the Caribbean Community ( CARICOM), “where just a few days ago, the Association of CARICOM Central Banks adopted PAPSS as their preferred payment infrastructure for a pilot project,”
Professor Benedict Oramah, President and Chairman of the Board of Directors, Afrixembank, said since its establishment three decades ago, the Bank had been instrumental to the cause of the continent’s growth.
He assured that the Bank was proactively mobilising continental and global resources and partnerships to build industrial complexes across the continent.
PAPSS to ensure convertibility of African currencies
The Afreximbank Board Chairman stated that with PAPSS, every African currency will become convertible within Africa. Afreximbank backs the Clearing and Settlements with an amount of $3 billion.
“With this level of financial commitment to start up the initiative, you can now understand why for 60 years it never saw the light of day; you can now appreciate why we need our own institutions if we hope to attain our development aspirations,” he said.
Afreximbank was established in 1993 by African Governments, African private and institutional investors as well as non-African financial institutions and private investors for the purpose of financing, promoting and expanding intra-African and extra-African trade.