African Union’s Post

Africa is committed to accelerate the establishment of its own financial institutions to address the existing challenges of the current global financial architecture that does not favor Africa’s transformation and development needs. 🏦The push for 𝐀𝐟𝐫𝐢𝐜𝐚’𝐬 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐢𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐢𝐨𝐧𝐬 is expected to improve Africa’s access to capital, impartial debt management mechanisms, and fair credit and risk assessments. There is an urgent need to establish the African Union Financial Institutions (AUFIs) that include: ▪️African Central Bank ▪️The African Monetary Fund ▪️The African Investment Bank ▪️ The Pan-African Stock Exchange. 📈 The institutions will place Africa in a stronger position in the global financial architecture. 📽️Explainer

Nine ways Africa will benefit from the establishment of African Union Financial Institutions. The Constitutive Act of the AU mandates the creation of 3 key financial institutions namely the African Central Bank (ACB), the African Monetary Fund (AMF), and the African Investment Bank (AIB). The establishment of the African Financial Institutions is a flagship program of Agenda 2063 and these institutions are seen as key in accelerating the continent’s regional integration and socio-economic development as they will play a focal role in the mobilization of resources and management of the financial sector. The role of these institutions is to implement the economic integration called for in the 1991 Treaty Establishing the African Economic Community (Abuja Treaty). #AUFI #AUFinancialInstitutions #Agenda2063.

2 days to go! Africa’s #infrastructure financing needs and financing gaps remain in the billions. The financing available for infrastructure tends to be in foreign currency which exposes projects to significant volatility as currencies fluctuate. Join KPMG East Africa and IPFA on 21 February 2024 as they deep-dive into "The Local Currency Imperative", and share valuable insights and strategies to unlock the immense potential and benefits of local currency financing for Africa's #infrastructure revolution. Click here to register for the session: https://bit.ly/48awlu0

A very comprehensible update from our partner in currency, IFC Treasury & Mobilization looking at offshore and onshore currency solutions. With a testimony from Moses Clocuh, the co-founder and director of Accra Medical Centre: "Since most of our revenue is in cedi, we knew that any foreign debt could be fatal to our operations and financial sustainability. With the cedi continuing to depreciate since the financing was concluded, the local currency loan has been advantageous and very strategic.” The challenge of foreign exchange fluctuations is not unique to Ghana. The aftermath of the COVID-19 pandemic, Russia’s invasion of Ukraine, and the global rise in interest rates have had major impacts on economies across Africa and around the world in the form of inflation and currency depreciation. #capitalmarkets #innovation #sdgs #developmentfinance

The African Financial Institutions Consultative Forum. 📆13-15 Dec 2023. The African Financial Institutions is a flagship programme of #Agenda2063 that aims to accelerate the continent’s regional integration and socio-economic development through mobilisation of resources and management of the financial sector. The three institutions are beneficial for various reasons: 1. The African Monetary Fund. The Fund will serve as a pool for central bank reserves and AU Member States’ national currencies. The AMF will facilitate the integration of African economies by eliminating trade restrictions and providing greater monetary integration. 2. The African Investment Bank. The purpose of the AIB will be to foster economic growth in Africa by promoting public and private sector investment to accelerate regional integration. The investment bank will mobilise resources from capital markets within Africa and in the diaspora to finance investment projects in African countries. 3. The African Central Bank will build a common monetary policy and single African currency to accelerate economic integration. The African Central Bank is key to create and manage the continental common currency, promote exchange rate stability, manage competitive exchange rates depreciation, support the establishment of a multilateral system of payments in respect of current transactions between members states, and eliminate foreign exchange restrictions that hamper the growth of world trade. Follow the discussions online on - https://lnkd.in/gnx4SU4S Brief - https://lnkd.in/geNqet7K

🌍 Collaborative Strategies to Mitigate Foreign Currency Fluctuations in Africa Navigating the financial landscape in Africa comes with its unique set of challenges, particularly when it comes to fluctuating foreign currency rates. These fluctuations can significantly impact investments, budgeting, and overall financial stability. To tackle these challenges, it's crucial to adopt collaborative strategies and leverage innovative solutions. Here are a few approaches to consider: * Hedging Currency Risks: Implementing financial instruments to hedge against currency risk can provide a buffer against fluctuations. * Diversifying Investments: Spreading investments across different regions and currencies can reduce the impact of any single currency's volatility. * Strengthening Local Partnerships: Collaborating with local financial institutions can offer insights and strategies tailored to specific markets. By focusing on these strategies, we can better manage the risks associated with foreign currency fluctuations and ensure more stable financial outcomes for our projects. Looking forward to discussing these strategies further with Adrian and exploring how we can continue to support Africa's growth together! #Finance #ForeignCurrency #AfricanGrowth #InvestmentChallenges #FinancialStability #RiskManagement #CFO #Strategy

The volatility of #currency markets poses a major risk to African businesses borrowing in hard currencies. IFC - International Finance Corporation is stepping up its efforts to increase the availability of local currency financing solutions and local capital market development in #Africa - mitigating risks for businesses while catalyzing new investment. Check out this feature story to learn more: 👇 http://wrld.bg/bToO50Rl5zM IFC Africa

We are one step closer to expanding the use of Special Drawing Rights (#SDRs) to support high-impact development financing. The channeling of these international reserve assets through #MDBs offers an additional opportunity to unlock more capital for essential development projects in #LatinAmerica, the #Caribbean and beyond. Hybrid capital instruments have a multiplier effect. In this case, $1 of hybrid capital = $4 in development loans.   #LeverageSDRs #FinancialInnovation #CapitalAdequacyFramework International Monetary Fund, African Development Bank Group, Hassatou Diop N'Sele https://lnkd.in/eCba5Cjk

BRICS bank to help African countries tackle urgent challenges: News24 reports that the New Development Bank created by BRICS countries in 2015 can help finance African countries’ projects to tackle their most urgent challenges. According to the bank’s former Brazilian president Dilma Rousseff, the BRICS countries are “good partners” for Africa, adding the bank would finance physical and digital infrastructure projects in Africa as well as educational ones. The post BRICS bank to help African countries tackle urgent challenges first appeared on Future Media.

#Ethiopia #Economy #Africa One of the crucial agenda items that the annual AU Heads of States Summit of 2024, to be held tmrw and the day after, will be discussing is the evaluation of the process for the opertionalization of three important African Financial Institutions: 1. African Central Bank (ACB) 2. The African Investment Bank (AIB), and 3. The African Monetary Fund (AMF) For more on the why and how of these institutions, look at the link below. The hope is Africa will sooner than later move to enhanced economic integration. https://lnkd.in/dzSjpmcA