President Nana Addo Dankwa Akufo-Addo says it has become urgent for a Pan-African payment and settlement system to be set up to reduce the risks of exchange rate volatility associated with cross-border trade and investment.
Such a system, he said, should prepare the ground for the Single Payments Area across the entire continent, potentially as early as 2022, to enable financial inclusion critical to meeting the Agenda 2063 Goals and the Sustainable Development Goals (SDGs).
“I am delighted that the African Union is collaborating with the Association of African Central Banks and AfroChampions for the establishment of an African Inter-Regional Payments and Settlement Platform to address the issue of free movement of capital across the continent. An advanced unified financial architecture for the whole continent is foundational to the sound development and progress of all these connected efforts and undertakings,” he said.
The President made the call in a speech read for him by the Foreign Affairs Minister at a virtual conference of the second mid-year coordination meeting of the AU Financial Institutions, in Addis Ababa, Ethiopia.
COVID-19 recovery phase
President Nana Akufo-Addo further said the coronavirus pandemic has brought to the fore the importance of financial autonomy.
He, therefore, underscored the need for the implementation of the African Union Financial Institutions, saying will be crucial in this recovery phase and in building more resilient and endogenous economies for an emerging Africa as well as in fulfilment of the goals set out in Agenda 2063.
“The African Union Financial Institutions will facilitate the creation of an enabling environment for a modern and strong African financial system to mobilise domestic and external resources to enable the diversification of intra-African export products, thereby fostering regional and global competitiveness of the products,” he said.
“The establishment of Pan African Stock Exchange will facilitate the integration of capital markets through cross-border trading and settlement of securities, removal of the stringent regulatory environment, help in mobilising resources from capital markets inside and outside Africa and channel diaspora’s remittances toward longer-term productive investments in African countries,” he added.
The International Monetary Fund (IMF), he said, has estimated that Emerging Markets and Developing Economies (EMDE) will require $2.5trillion to effectively fight the pandemic and resuscitate their economies.
“While the IMF is providing $ 1.2trillion in lending, there is a funding gap of $1.3 trillion. To bridge this gap, the continent has to mobilise extra resources to close the fiscal space. This calls for innovation by all stakeholders, including African financial institutions, stock exchanges, central banks and the private sector to proffer short, medium, and long term financing solutions,” the President said.
Source: dailystatesman.com.gh/Isabella Agyakwa