Prez Akufo-Addo woos fellow African Presidents to withdraw sovereign reserves from foreign banks
During the recent Presidential Dialogue on African Union Financial Institutions at the 37th African Union Summit in Addis Ababa, Ethiopia, President Akufo-Addo made a resolute call for African nations to withdraw a significant portion of their public funds and assets held in foreign banks.
Highlighting the prevailing challenges faced by African states in accessing development finance, President Akufo-Addo emphasized the need for fundamental reforms in the global financial architecture. He underscored the detrimental impact of negative interest rates on sovereign reserves deposited in foreign financial institutions, urging his counterparts to redirect at least 30% of these reserves to African multilateral institutions.
“We’re all in agreement that the way the Global Financial architecture works at the moment, doesn’t work in our favour and that there is a need to make some fundamental systemic reforms. As it stands virtually all our countries, we hold our reserves in foreign Banks attracting largely negative rates of Interest.
“We should decide that a minimum of 30% of the reserves of each one of us (African States) Sovereign reserves should be invested in the African multilateral institutions. I speak about the AfDB, I speak of Afreximbank (African Export-Import Bank) which will strengthen their balance sheets and strengthen their capacity also to facilitate more and more resources for our development,” President Akufo-Addo remarked.
The President’s proposal aims to bolster the balance sheets and enhance the capacity of African financial institutions such as the African Development Bank (AfDB) and the African Export-Import Bank (Afreximbank) to mobilize resources for the continent’s development initiatives.
While acknowledging the radical nature of his proposition, President Akufo-Addo drew parallels with the establishment of an African Investment Bank, a move endorsed by the 37th Ordinary Session of the African Union held in Addis Ababa.
Libya was designated as the host country for the African Investment Bank, reflecting the collective vision of African leaders to strengthen the role of African finance in driving economic growth and development.
The unanimous support for Libya’s hosting of the bank underscores the commitment of African nations to promoting financial autonomy and self-reliance on the continent. President Akufo-Addo’s initiative signals a broader shift towards reshaping Africa’s financial landscape and advancing the continent’s economic prosperity in line with the aspirations of the African Union.
As African states deliberate on the implementation of these proposals, President Akufo-Addo’s call serves as a catalyst for fostering greater financial independence and resilience across the continent.
