President Nana
Addo Dankwa Akufo-Addo has highlighted the risks and costs associated with
African nations relying on foreign capital markets.
In his keynote
address at the 30th AGM of the African Export and Import Bank (Afreximbank),
President Akufo-Addo said it is important for Africans to build their
indigenous financial institutions in order to achieve economic growth through
domestic resource mobilization and private sector development.
President
Akufo-Addo explained the drawbacks of depending on foreign capital, citing
financial leakages, high borrowing rates, and interest payments as key issues.
According to
him, such reliance undermines the growth of domestic financial institutions and
hampers the development of African economies.
He urged his
fellow African leaders to prioritize the establishment of strong financial
institutions to foster prosperity across the continent.
“Unless we have
strong financial institutions we are not going to develop, we have learnt over
the decades that relying on foreign capital is both risky and costly. It has resulted
in huge financial leakages to a high cost of default-driven borrowing rates and
interest payments and undermine the growth of our financial institution’s
domestic resource mobilization and private sector development,” President
Akufo-Addo said.
Mr Akufo-Addo
outlined some interventions that African leaders should embrace to overcome the
current economic challenges. He emphasized the importance of capitalization and
effective coordination with the African Union.
“There is
capital and effective coordination with the African Union. Despite constant
efforts made by many African governments during an extremely economic global
operating environment, our economic financing institutions remain highly
under-capitalised,” the President noted.
Afreximbank, a key
player in facilitating trade and economic development in Africa, has taken a
significant step by providing $10 billion in funding for the establishment of
an adjustment fund.
This fund aims
to support countries under the African Continental Free Trade Area (AfCFTA), a
landmark agreement aimed at boosting intra-African trade and economic
integration.
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