Governor's meeting is timely - ahead of the Spring Meetings and offers an ideal opportunity to take the Africa position to the Bretton Woods institutions.
African Central Bank Governors met for their second Caucus meeting on the margins of the 8th Joint Annual Meetings of the African Union Specialised Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration and the ECA Conference of African Ministers of Finance, Planning and Economic Development.
Chaired by Mr. Yohannes Ayalew, Vice-Governor of the National Bank of Ethiopia, who hosted the meeting and Dr Louis Kasekende, Deputy Governor of the Bank of Uganda, delegates followed up on the outcomes of the inaugural event that was held in Abuja, Nigeria, in 2014. The focus of the Caucus was also on enhancing the role of Central Bank Governors in the consultations leading up to the Third International Conference on Financing for Sustainable Development (FfD) which will take place in Addis Ababa in July 2015.
The Governors highlighted the need to build on the policy commitments articulated in the Monterrey Consensus; the Doha Declaration on Financing for Development; the United Nations Conference on Sustainable Development (Rio+20) and other major United Nations conferences, and on the priorities expressed by the General Assembly when it called for the Third International Conference on Financing for Development. The meeting called for greater coherence between the Financing for Development and post MDGs 2015 intergovernmental processes and welcomed Agenda 2063 as Africa's new framework for inclusive and sustainable development.
Speaking at the conclusion of their deliberations, Mr. Yohannes Ayalew said the Central Bank Governors recognised the critical challenge of ensuring adequate mobilisation of public and private domestic resources to support development, as highlighted in the Monterrey Consensus and the importance of enhancing domestic resource mobilisation as a critical vehicle for financing Africa's structural transformation. "Adequate mobilisation of government revenues is required for direct financing and for leveraging private funds for investments in public services and social protection. In our capacity, we undertake to continue providing a conducive macroeconomic environment, assisting African countries to develop an inclusive domestic financial sector, with adequate and affordable access by Small and Medium-sized Enterprises (SMEs), individuals and households to a full range and means of financial services. We advocate to further deepening the domestic financial sector to provide medium to long term financing, developing microfinance sub-sector and improving efficiency of the financial sector as we continue to improve the regulation of the financial sector using appropriate micro and macro prudential measures".
Mr Kasekende stressed the importance of international resources for African countries and the critical need to effectively harness them to achieve Africa's overarching goal of attaining structural transformation. "We recognise the catalytic role of ODA, as one of the key sources of international development co-operation and welcome improvements in the business environment in many countries which have translated into an increase in FDI flows. As Central Bank Governors, we are committed to the continuous building of buffers that can be used to promote financial stability in our economies and to mitigate against both domestic and external shocks", he said.
He added that the Governors recognised the increasing importance of remittances as one of the largest external source of international inflows to Africa and the need to support financial instruments that can channel remittances into development programs and projects, such as Diaspora Bonds.
'There is need for reforms of international financial institutions and monetary systems to give greater voice to African countries so as to accommodate Africa's priorities and as Governors we call for strengthened regulation and supervision of under-regulated financial markets and institutions such as shadow banking and 'too-big-to fail' institutions. We also call encourage rating agencies to have a broader and deeper analysis of African economies, in order as to provide an accurate and balanced assessment', he concluded.
The Governors reiterated their commitment to strengthening the tools for stress testing of the financial sector and coordinating and cooperating in the implementation of anti-money laundering laws to safeguard the integrity of African economies.
In line with several side event themes discussed at the week-long meeting, Governors reiterated the importance of science, technology and innovation to sustainable development as articulated in the Common African Position and committed themselves to harnessing the use of technology in extending financial services while building up regulatory capacity for financial stability and stressed the importance of data to track and report on financial flows.
In conclusion, the Governors renewed their commitment to the structural transformation of African economies, and resolved to intensify and support efforts for inclusive growth and transformative development in Africa. Furthermore, they called for effective coordination and a coherent, strong articulation of Africa's priorities in the Post- 2015 Development Agenda.
