At least thirty percent of all public funds and other assets held in foreign banks and financial institutions are to be withdrawn by Ghana, according to President Akufo-Addo’s proposal.
He claims that Ghana and other African nations have a penchant for stashing their sovereign reserves in foreign financial institutions, which he claims is impeding the continent’s desperately needed development funding.
Speaking on the sidelines of the 37th African Union summit in Addis Ababa, Ethiopia, at the Presidential Dialogue on African Union Financial Institutions, he urged his colleagues to decide as a group that all nations should remove thirty percent of their foreign reserves and place them in African institutions.
He declared, “We all agree that some fundamental systemic reforms are needed because the way the global financial architecture operates right now does not work in our favor.”
“As it stands, practically all of our countries hold our reserves in foreign banks that are attracting largely negative rates of interest,” stated President Akufo-Addo.
It is recommended that a minimum of thirty percent of the sovereign reserves of all African states be allocated to African multilateral institutions.
“I am referring to the African Development Bank (ADB) and the African Export-Import Bank (Afreximbank), which will bolster their financial statements and increase their ability to provide an increasing amount of resources for our progress.”
The President based his call on the lessons learned from the COVID-19 pandemic, during which many states had and continue to have difficulty accessing development financing to implement economic recovery programs.
Although he admits that “it’s a relatively radical proposal,” he maintains that his call coincides with the establishment of an African Investment Bank.
The African Union’s 37th Ordinary Session, held in Addis Ababa, Ethiopia, approved Libya as the host country for the African Investment Bank.
The African leaders’ unanimous decision was based on Libya’s posture efforts and vision for strengthening the role of African finance, and they urged member states that had not yet ratified the bank’s charter to do so after reviewing the distinguished efforts.
