Let’s invest 30% of our foreign reserves in Africa’s financial institutions – Akufo-Addo urges AU leaders

President Akufo-Addo has called on African Heads of State and governments to consider taking a collective decision to invest up to thirty percent (30%) of their foreign sovereign reserves in African financial institutions to boost their balance sheets and their ability to support Africa’s rapid development.
Currently, all African countries, according to President Akufo-Addo, are holding and investing one hundred percent (100%) of their foreign sovereign reserves in financial institutions outside Africa, even though those investments yield little to no profits. This phenomenon, President Akufo-Addo, said has not and will not yield any benefits to the continent.

The President made the call when he delivered the keynote address at the Heads of State and Government’s Dialogue on Saturday, 17 February 2024, at the 37th Ordinary Session of the Assembly of Heads of State of the African Union (AU), on the theme: ‘Establishing African Union Financial Institutions in the Context of Africa’s Agenda for Global Financial Architecture Reform.’

Africa’s Financial Institutions

President Akufo-Addo said it is time to strengthen the continent’s financial and multilateral establishments to increase their capacity to support the continent’s developmental agenda with the catchphrase “God helps those who help themselves.” The President to this end pointed to the fact that it is time for the African people to look inward and to support themselves to develop.

“We are all in agreement that the way the global financial architecture works is not in our [Africa’s] favour, and there is the need to make some fundamental and systemic reforms. But making the reforms also requires that we [Africans] also take some steps that will assist us to have a greater impact in the way in which our economies are financed.
“As it stands, virtually all our countries hold our reserves in foreign banks, attracting largely negative rates of interest. The proposal that I am going to put to the plenary is that we should decide that a minimum of 30% of the reserves of each one of us, sovereign reserves, should be invested in the African multilateral institutions,” President Akufo-Addo advocated.

“I speak about the AfDB, I speak of Afreximbank. We should strengthen their balance sheets and strengthen their capacity to facilitate more and more resources for our development. If we find a way that we can increase the financial power of our institutions, we are in a better place to finance our development,” Akufo-Addo added.