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African Union Financial Institutions Established

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African Union Headquarters In Ethiopia
African Union Headquarters In Ethiopia

A consultative meeting of African countries on the establishment of African Union (AU) financial institutions kicked off here Wednesday with a call for participants to devise mechanisms to accelerate the establishment of these institutions.

The three-day meeting has gathered participants from member countries’ finance ministries, central banks, AU organs, regional economic communities and development partners, with the purpose of addressing the economic and political challenges that hinder member states from signing and ratifying legal instruments necessary for establishing the financial institutions.

The AU’s constitutive Act mandates the creation of three financial institutions: the African Central Bank, the African Monetary Fund, and the African Investment Bank.

Zambian Minister of Finance and National Planning Situmbeko Musokotwane emphasized the importance of establishing these financial institutions, highlighting their crucial role in supporting the realization of the benefits of the African Continental Free Trade Area (AfCFTA).

“The timing of this consultative meeting is crucial as the African Continental Free Trade Area aims to eliminate trade barriers and boost intra-Africa trade,” said the minister at the meeting’s outset.

Acknowledging the slow progress in establishing these institutions due to various challenges, the minister also noted significant headway, such as adopting macroeconomic convergence criteria to guide the harmonization of fiscal and monetary policies and financial system convergence.

He expressed satisfaction that the proposed draft statutes for establishing the African Monetary Institute, a precursor to the African Central Bank, have been proposed by the African Union Commission in collaboration with the Association of African Central Banks.

According to him, member countries anticipate that once the draft statutes are approved and the African Monetary Institute becomes operational, it will commence activities to enhance cooperation in monetary and financial matters, leading the preparation for the African Central Bank’s establishment.

He affirmed Zambia’s readiness to support the establishment of these financial institutions, expecting them to contribute significantly to the continent’s economic development, stability and prosperity.

Albert Muchanga, the AU commissioner for Economic Development, Trade, Tourism, Industry and Minerals, said that the establishment of these financial institutions aims to enhance cooperation in monetary and financial issues across Africa. He added that this initiative is particularly significant given the foreign exchange market instability experienced in many African countries.

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