African Union must work collectively to reform the global financial architecture as well as build and strengthen the union’s financial institutions. This was said by Ghana’s President and AU’s champion for financial institutions Nana Akufo Addo during his delivery of the second report to the Assembly in the just concluded AU summit in Addis Ababa, Ethiopia.
Akufo-Addo noted that the AU is currently engaged in the process of establishing four financial institutions (AUFIs) namely, the African Central Bank (ACB), the African Investment Bank, the African Monetary Fund and the Pan African Stock Exchange (PASE)
According to Nana, the major challenges towards the establishment of AUFIs is the slow rate of ratification of legal instruments, signatures as well as limited capacity of member states to finance these establishments. Regrettably none of the AUFIs has reached the minimum number of ratifications required for enabling legal instruments to enter into force to facilitate substantive establishment.
On the issue of Special Drawing Rights (SDR) reallocation, with the context of optimizing its impact on Africa, Nana recounted that in 2021 in Paris, world leaders made a commitment to allocate the historic SDR 650BN issuance to IMF member states with Africa’s quota allocation of 5% which amounts to 33.3BN.
“We value this commitment to additional resources of which our continent is in dire need of. It is unfortunate however that the only proposal that has been put on the table by European countries is to re-channel these SDRs through only one institution; the IMF. IMF should not be the sole beneficiary of this rechanneling , AFDB and Afreximbank should be recipients of these recycling as well” added Akufo-Addo .
Thus, Nana urged The AU assembly to urge the G20 leaders to stick to their commitment to reallocate Africa the SDR$100BN agreed to during the Paris summit in May 2021