President Nana Addo Dankwa Akufo-Addo has urged African Union Member States, who have not signed and ratified the legal instrument for the African Investment Bank and Monetary Fund, to expedite the process of accession.
He encouraged them to ensure that efforts were coordinated leading to the operationalisation of the African Monetary Institute, the establishment of the Pan African Stock Exchange, and the setting up of African Payment and Settlement System in 2020.
He said it was time to develop financial integration and autonomy for the Continent.
President Akufo-Addo made the appeal in a speech read on his behalf by Madam Shirley Ayorkor Botchwey, Minister of Foreign Affairs and Regional Integration, at the Second Mid-Year Coordination Meeting between the AU, Regional Economic Communities (RECs), Regional Mechanisms and Member States.
The Mid-Year Coordination Meeting is the principal forum for the AU, RECs and regional mechanisms to harmonise their work and coordinate implementation of the continental integration agenda.
The virtual meeting takes place amid the impact of the COVID-19 pandemic on the socio-economic situation of the Continent, which requires high-level coordination and streamlining of efforts.
The meeting discussed the draft proposals on the Effective Division of Labour between the AU, RECs, regional mechanisms and member states.
President Akufo-Addo, also the Chairman of the Authority of Heads of State and Government of the Economic Community of West African States (ECOWAS), said Article 19 of the Constitutive Act of the African Union provided for the establishment of its financial institutions, a flagship project of Agenda 2063.
These include the establishment of an African Central Bank, the African Monetary Fund, the African Investment Bank and the Pan-African Stock Exchange.
He said the African Investment Bank and Pan African Stock Exchange were expected to be created in 2016, the African Monetary Fund in 2018, and the African Central Bank in 2028/34, as stated in the first 10-Year Plan of Agenda 2063.
“Since the adoption of the protocols for the establishment of the African Investment Bank and African Monetary Fund in 2009 and 2014, respectively, the signatures and ratifications registered have not reached the requisite number to enter into force,” he said.
“In addition, there have been inadequate resources allocated to the AU Commission (Department of Economic Affairs) for advocacy and to support the implementation of the strategy for the establishment of the African Central Bank and Pan African Stock Exchange.”
President Akufo-Addo, also the Champion of the AU Financial Institutions, said the African Monetary Institute (AMI), a precursor to the African Central Bank and the Pan African Stock Exchange, was supposed to be set-up and made operational by 2020 but failed due to funding challenges.
He said the Central Bank of Nigeria had already made available office space for the AMI and the Association of African Central Banks (AACB) was keen to second experts to support the work of the Institute.
He said the implementation of the AU Financial Institutions would be crucial in the 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.
He said they would facilitate the creation of an enabling environment for a modern and strong financial system to mobilise domestic and external resources to enable the diversification of intra-African export products, thereby fostering regional and global competitiveness.
Africa had more than 40 currencies, which were characterised by frequent volatility, illiquidity and rarely traded status on the global financial market, which made trading among the countries difficult, he said.
“This constitutes one of the biggest barriers to the effective implementation of the Africa Continental Free Trade Area (AfCFTA) and the development of the Continent,” President Akufo-Addo said.
“We must also take note of the digital infrastructural elements of the ongoing process to keep to the 1st January, 2021 AfCFTA operationalisation timeline.”