Ghanaian President Nana Akufo-Addo called on African heads of state to collectively invest 30% of their foreign reserves into African financial institutions. He made the remarks in a keynote address at the 37th African Union Assembly in Addis Ababa, Ethiopia.
Currently, Akufo-Addo noted that African countries hold 100 percent of their reserves in foreign banks despite low or negative interest returns. "This yields little to no profit for our continent," he said. Redirecting even 30 percent of reserves could strengthen African development banks like the African Development Bank and Afreximbank.
"If we increase the financial power of our institutions, we are in a better place to finance our development," Akufo-Addo stated. He believes this shows Africans helping themselves through mutual investment rather than relying on outside support.
In his response, Kenyan President William Ruto fully endorsed both of Akufo-Addo's proposals. "We must empower our own African financial institutions. 30 percent of our reserves sitting elsewhere earning negative interest should be invested here," Ruto remarked.
Akufo-Addo also called for an annual African economic summit focused on the continent's strategic financial challenges. Currently, leaders travel frequently to meet with other countries like China, India, and the US. "If we can meet to discuss matters affecting our continent, we obviate the need for all this travel," he explained.
Ruto agreed and offered to host the first such summit in Kenya. "It is only fair that others now come to our capitals. We will not be asking for too much," Ruto stated. At the event, Akufo-Addo, Ruto and Zambian President Hakainde Hichilema launched the Alliance of African Multilateral Financial Institutions, also known as "The Africa Club". It aims to advance members' interests on global finance and advocate for African institutions.
Seven leading African banks are founding members, including the African Development Bank and Afreximbank. The alliance will work on innovative financial strategies, debt management and implementation of Agenda 2063, Africa's strategic development framework.
