Addis Ababa — Raising more domestic resources will increase Africa's sovereignty, independence, and reduce its susceptibility to external shocks and, most importantly, ensure a more reliable flow of funds for the continent's transformation agenda. That is according to Guinea's minister of economy and finance, Malado Kaba.
Kaba was speaking during a round table discussion today on how to finance Africa's development agenda. Organized within the framework of the ninth joint AUC-ECA Conference of Ministers in Addis Ababa, the roundtable panelists included Ghana's deputy minister of finance and economic planning, Monah Quartey, Ugandan minister of state for finance, planning and economic development, Fred Omach, the deputy chairperson of the African Union Commission, Erastus Mwencha, and Malado Kaba who chaired the event.
Panelists noted that domestic resource mobilization should be the main strategy for financing Africa's development in a sustainable manner. Innovative strategies for domestic resource mobilization, such as tax reforms, unused financial resources like pension funds, capital markets and savings, were described as critical. Also, the ministers were of the opinion that promoting intra-Africa tourism, trade, and banking will keep Africa's resources within the continent and facilitate growth.
Fred Omach deplored the fact that Africa is losing more than $50 billion per annum to illicit financial outflows. He said Africa must intensify measures to curb such outflows and deepen engagement with receiving countries in order to repatriate the money, which can be used to finance the continent's development. The Ugandan minister suggested that better banking decisions would move Africa forward.
"The central bank reserves of Africa totaling to over $600 billion are kept in banks in Europe and America," said Omach. "Why can't the African Union say all these reserves be sent to the Africa Development Bank (ADB), which is triple A rated, and the ADB president be allowed to utilize part of it to fast-track agenda 2063, enabling us to achieve our vision in 25 years instead?"
Omach's point was reiterated by AUC's Erastus Mwencha who said, "Africa is not poor in terms of resources. Our sovereign funds are in excess of $600 billion but we derive no gains from those funds sitting in banks abroad."
Kaba argued that 70% of funding for Africa's development agendas should be raised internally to ensure sovereignty before looking outside the continent.
Citing the example of her country, Ghana, Monah Quartey said a solid communication plan that persuades and attracts investor confidence in African countries is one of the ways to speed up the continent's growth.
The need for strong continental and sub-regional financial institutions to support Africa's investment programmes was highlighted.
