Africa seeks to accelerate the establishment of African Union Financial Institutions

Addis Ababa, December 13, 2023 (FBC) – The African Union is convening a consultative forum to assess the implementation of the African Union Financial Institutions (AUFIs).

The meeting which is underway in Lusaka, Zambia from 13- 15 December 2023 gathers participants from the Ministries of Finance, Central Banks, African Union Organs and Specialized Agencies, Regional Economic Communities, Association of African Central Banks, African Securities Exchanges Association, and development partners look into the economic and political challenges impeding the Member States ability to sign and ratify legal instruments establishing the financial institutions, constraints that restrain the continent to collectively pool their sovereignty in order to mutualize their efforts and resources for the establishment the AUFIs.

The forum will also formulate a strategy to generate the much-needed consensus and enhanced political will on key issues, and galvanize the momentum towards the establishment of the AUFIs.

The dynamics in the global economic and financial structures continue to present challenges that threaten the macroeconomic stability, economic growth, and sustainable development in Africa, according to AU.

The continent has taken on various economic and political integration initiatives, such as trade promotion, acceleration of inclusive growth and sustainable development to minimize the impact of the resulting instability.

While trade integration has received significant attention and made great strides over the years, financial integration has progressed slowly.

In 2009 and 2014, the legal instruments for the establishment of the African Investment Bank (AIB) and the African Monetary Fund (AMF) were adopted respectively.

However, none of the financial institutions has reached the requisite number of ratifications to enter into force. The inadequate funding for establishing the African Union Financial Institutions has been detrimental to the operationalization of the African Monetary Institutes, which is the first step toward the establishment of the African Central Bank (ACB).

The urgency to expedite the establishment of the African Union Financial Institutions has been underscored by the changing global economic landscape due to the COVID-19 pandemic, climate change and insecurity which also calls for the revision of the legal instruments establishing the AU Financial Institutions.

The establishment of African Union Financial Institutions is believed to contribute significantly to the economic development, stability, and prosperity of the continent by ensuring, among others, economic stability, increase trade and investment, reduced dependency on external sources.