African Ministers, Central Bank Governors Approve Statute To Establish AMI

Africa Union (AU) has inched closer to realising the establishment of the African Monetary Institute (AMI). It is seen as a landmark institution expected to serve as the cornerstone of Africa’s financial and economic integration, as well as the operationalisation of the African Financing Stability Mechanism (AFSM), which is essential for fostering financial resilience across the continent.

This is so as the finance ministers and governors of the African central banks adopted the finalised draft statute for the AMI and the related framework for the AFSM yesterday. The AFSM is intended to help cushion the continent in case of financial crises.

The AMF’s objectives include: providing financial assistance to African Union member states; coordinating monetary policies of member states; promoting cooperation between member states’ monetary authorities; encouraging capital movements between member states; and acting as a clearing house and undertaking macroeconomic surveillance.

The ministers and governors adopted the draft statutes at the end of the meeting of the 5th African Union Extraordinary Session of the Specialised Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration in Abuja.

The meeting brought together leaders from across the continent to discuss the future of Africa’s financial and economic integration.

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In his opening remarks, governor of the Central Bank of Nigeria Olayemi Cardoso commended the experts who used the occasion of the 3-days meeting to finalise the draft statute for the AMI and the related framework for the AFSM. “Your contributions have ensured that these documents are well-prepared for adoption by the Honourable Ministers and Central Bank Governors today. I salute your professionalism, dedication, and collaborative spirit in deliberating complex issues, which have brought us closer to achieving our shared vision,” Cardoso stated.

AMI and the AFSM are being designed to foster Africa’s macroeconomic convergence, financial stability, and economic resilience. Cardoso believes that. “The establishment of the AMI will mark a significant milestone in Africa’s journey toward a common currency, while the AFSM represents a proactive approach to safeguarding financial stability in an increasingly uncertain global economic landscape.”

Cardoso says the extraordinary meeting, convened under the theme “Building a Stronger and Resilient African Financial Architecture,” underscores the continent’s unwavering commitment to realising the ambitions of the Abuja Treaty and the African Union’s Agenda 2063.

The CBN governor told the audience at his office that the CBN has implemented significant reforms aimed at fostering stability, resilience, and growth, including unification of the exchange rate, enhancing

transparency, and boosting investor confidence in Nigeria’s foreign exchange markets in alignment with efforts to build a stronger and resilient African financial architecture.

Also, Nigeria’s minister of finance and coordinating minister of the economy Wale Edun said the move underscores the importance of African working collectively in a more coordinated manner, a situation he said will help “in shaping up our economies in such a way that we will not be dependent on aid from international partners.”

“I am confident that the outcomes of this meeting will pave the way for approval by the Assembly in February 2025,” Mr Edun said, adding that the efforts will not only align with the aspirations of Agenda 2063 but also serve as a vital contribution to the financial and economic independence of our continent.

In a remarkable outburst, vice president of Afreximbank George Elombi said there is a third force working to scuttle the establishment of AMI while calling on all stakeholders to intensify effort to ensure that a stronger and resilient African economy is achieved through establishment of the framework for AMI.

Chief economist of the African Development Bank, Prof Kavin Urama said Africa currently pays 50 per cent as capital interest amidst high refinancing risks and a declining foreign direct investment at about 44 per cent, a situation he said can be made to get better with the integration of the continent’s economic policies. He said only remittances remain good that have risen by 22 per cent.

Deputy executive secretary and chief economist of the United Nations Economic Commission for Africa (ECA) Dr. Hanan Morsy called on the leadership of the continent to remain focused on the fact that the aim is about empowering the national economies for strength to ensure that every African benefits from its growth.

She said the success of the agenda depends on determination of the leadership structure to implement policies for growth. “Together we can build an Africa that is prosperous and more united than ever,” Morsy stated.