Finance Ministers and Central Bank Governors from across the African continent recently converged in Abuja for a crucial meeting under the aegis of the “African Caucus.” The three-day meeting, themed “Facilitating Intra-African Trade: Catalyst for Sustainable Development in Africa,” was declared open by President Bola Tinubu, who was represented by Vice-President Kashim Shettima.
By Kadiri Abdulrahman
Established in 1963, the African Caucus aims to amplify the voice of Africa’s apex bank governors among Bretton Woods Institutions (BWIs) members, particularly the International Monetary Fund (IMF) and the World Bank Group (WBG). The Caucus seeks to draw attention to development issues of particular interest to Africa. Membership in the Caucus is open to all African countries that are members of the IMF and WBG, with all 54 African countries currently participating. These countries are represented by their finance and economic development ministers and central bank governors, collectively referred to as the African Governors.
The views and concerns of African Governors are conveyed to the heads of the BWIs through a Memorandum presented at the Annual Meetings of the BWIs. At the Abuja meeting, President Bola Tinubu called for global cooperation among African countries to tackle their shared economic challenges and seize available opportunities.
Tinubu acknowledged that Africa is grappling with numerous challenges across economic, humanitarian, and social spheres. He advised that countries on the continent should take necessary measures to translate opportunities in natural resources and human capital into growth, innovation, and collaboration. The Nigerian President emphasized that the African Caucus meeting was an opportunity to brainstorm on major challenges and strategies for fostering inclusive growth and sustainable development in Africa.
Tinubu urged African countries to improve the quality of life for people across the continent by ensuring that democracy, good governance, and economic institutions work together. He described the Caucus meeting as a vital platform to share experiences, forge partnerships, and chart a collective path forward.
Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, stated that the meeting underscored the importance of trade as a driver of economic growth by creating opportunities for increased production, investment, and job creation. Edun, who also served as Chairperson of the Caucus, highlighted that trade can provide access to larger markets, new technologies, and capital.
“The African Continental Free Trade Area (AfCFTA) aims to promote trade among African countries by reducing trade barriers, harmonizing regulations, and facilitating the movement of goods and services within the continent,” Edun said. He added that based on available data, 41 African countries are projected to achieve stronger growth, with rates increasing from about 3.4 percent in 2022 to 3.8 percent in 2023, and rising to 4.3 percent in 2025. These rates exceed the global average of about 3.2 percent.
Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, urged African countries to leverage the support of global partners for sustainable economic growth. According to Cardoso, the theme of the 2024 meeting, “Facilitating Intra-African Trade: Catalyst for Sustainable Development in Africa,” is both timely and fitting. He noted that Africa stands at a crossroads, with unprecedented opportunities for development alongside significant challenges.
“To navigate this complex landscape and set the continent on a path of sustainable economic growth, we must leverage the support of our global partners. This is where the IMF and WBG play a critical role. Their expertise and resources can provide the essential impetus needed to unlock the continent’s vast potential,” Cardoso said. He emphasized that the continent now stands on the threshold of a new era in economic cooperation through AfCFTA, the largest such agreement in the world by both area and number of countries.
“According to data from the World Trade Organisation, intra-African trade accounts for an estimated 13 percent of the continent’s total trade, compared to 60 percent in Europe and 40 percent in North America. This indicates that significant efforts are needed to build a robust, economically diversified, and prosperous Africa,” Cardoso added.
He stressed that as monetary authorities, they have the responsibility to formulate policies that enhance trade among countries on the continent. “We can achieve this by fostering a financial landscape that encourages collaborative research and development to support our industries and generate economic wealth for our growing populations,” Cardoso said.
Cardoso also highlighted the importance of decisions on currency convertibility, cross-border transactions, payment systems, and the movement of people, goods, and services across borders. He urged African countries to share experiences and take useful lessons from their peers to address national challenges.
“Nigeria, like many other African countries, faces economic challenges. Nonetheless, we are committed to the vision of a united and economically integrated Africa. By sharing our experiences, including both successes and setbacks, we aim to contribute to paving the path toward sustainable and inclusive economic growth that benefits all citizens across the continent. Let us leverage our diverse experiences and expertise to tackle the obstacles hindering intra-African trade,” he said.
Mr. James Garang, Governor of the Central Bank of South Sudan, noted that equitable financing would accelerate the economic growth of countries on the continent. He mentioned that equitable financing is one of the issues to be addressed in the memorandum and the declaration of the meeting. He emphasized the need to reform the global financial architecture to reduce the cost of borrowing, enhance access to finance, and harmonize policies to ensure that Africa’s voice is heard.
“We must ensure that Africa has a seat at the table where decisions about the global financial architecture are made. There are also issues concerning access to energy, where the African Development Bank (AfDB) and the World Bank are taking lead roles to support the continent,” Garang said. He added that discussions were focused on improving trade among African countries and addressing the level of youth unemployment across the continent.
“The discussions have centered around the challenges with intra-African trade and the significant opportunities within the continent that we need to tap into. There is a session in the memorandum that focuses on improving youth employment and opportunities across the board. The various discussions in this meeting have agreed that Africa is on a good path, but there are things to be done to realize our full potential,” Garang said.
He also highlighted the opportunity for South Sudan to showcase areas where foreign companies and financial institutions can invest.
As the IMF and WBG prepare for their Annual Meetings in October, Africans are waiting for their responses to the resolutions reached by the African Governors at their Caucus meeting in Abuja. The Caucus has called on the IMF and World Bank Group to ensure that their support to member countries continues to be guided by principles of balance, even-handedness, and consistency with their own policies. These considerations are all the more important at a time when countries are facing adverse exogenous shocks and immense financing needs.
Africans also expect to see the seriousness of the African Governors in implementing some of their key resolutions, including strengthening the pan-African payment ecosystem, enhancing energy access, affordability, and connectivity, leveraging partnerships with Multilateral Development Banks (MDBs), and reforming the global financial architecture.
Source: NANFeatures