President Akufo-Addo Named “Champion” Of The African Union Financial Institutions

The 33rd Ordinary Session of the Assembly of Heads of State and Governments of the African Union has appointed President Akufo-Addo as “Champion of the African Union Financial Institutions.”

The decision of the Assembly was made on Monday, 10th February 2020, in Addis Ababa, Ethiopia, by the Chairperson of the AU, His Excellency Cyril Ramaphosa, President of the Republic of South Africa.

The creation of African Union Financial Institutions is one of the flagship projects of Agenda 2063, aiming at accelerating integration and socio-economic development of the continent.

The agreed timeframes in the first 10-Year Plan of Agenda 2063 were for the African Investment Bank and Pan African Stock Exchange to be established by 2016; the African Monetary Fund by 2018; and the African Central Bank and Single African Currency by 2034.

Whilst thanking the Assembly for the honour of the appointment, President Akufo-Addo stated that the “establishment of the AU Financial Institutions has always been at the centre of our agenda for continental integration, and that is why, over the years, we have adopted a treaty and several legal instruments to that effect.”

Currently, only twenty-two (22) Member States have signed the African Investment Bank (AIB) charter, with only 6 ratifications obtained, whilst twelve (12) countries have signed the African Monetary Fund charter, with only one (1) ratification.

At least, nine (9) more countries are needed to ratify the AIB charter for it to enter into force, and, in the case of the African Monetary Fund, fourteen (14) ratifications.

“The task to ensure these are done will be one of my immediate priorities. I will see to it that Ghana ratifies these charters promptly upon my return to Accra,” the President said.

He continued, “the establishment of the African Union Financial Institutions is critical for not only enhancing resource mobilization on the continent but also for providing the necessary impetus for growth and job creation. Their establishment is crucial for the effective implementation of the African Continental Free Trade Area (AfCFTA), and for achieving Agenda 2063: ‘The Africa We Want’. Financing our own development agenda remains our primary goal, and will require bold commitments from us.”

Amongst others, President Akufo-Addo pledged to ensure the prompt ratification of the various charters establishing the Financial Institutions; help take, under the direction of the Assembly, all necessary steps to facilitate the creation of the continental financial architecture essential for the realisation of AU Agenda 2063 and the integration process of the continent; and work with the host countries, i.e. the Republic of Cameroon for the African Monetary Fund, the Federal Republic of Nigeria for the African Central Bank, and Libya for the African Investment Bank towards their establishments.

Background

Article 19 of the Constitutive Act of the African Union provides for the creation of three institutions namely the African Central Bank, the African Monetary Fund and the African Investment Bank.

Furthermore, in January 2006, in Khartoum, Sudan, the Commission was requested by the Assembly of the African Union (Assembly/AU/Dec.109), to conduct a feasibility study on the creation of a Pan-African Stock Exchange (PASE). The three financial institutions and the PASE, constitute the African Union Financial Institutions (AUFIs).

In January 2005, the Assembly decided, in Abuja, Nigeria, decision No. Assembly/AU/Dec.64 (IV), that the African Central Bank should be located in West Africa, the African Investment Bank in North Africa, and the African Monetary Fund in Central Africa.

Following this decision, the Northern Region decided that the African Investment Bank should be located in Libya, the Central Region designated Cameroon as the host country of the African Monetary Fund, while the Western Region designated the Federal Republic of Nigeria as the host country for the African Central Bank.