African Development Bank Vice-President for the Private Sector, Infrastructure and Industrialization, Pierre Guislain, on Tuesday stressed the major role that African financial institutions play in regional integration.
"These institutions finance the private sector, which has to become the engine of Africa's regional integration," said Guislain at the opening of the Association of African Development Finance Institutions (AADFI) workshop on the sidelines of the Bank's Annual Meetings in Malabo, Equatorial Guinea.
The AADFI, which is also holding its 45th General Meeting in Malabo as part of the Annual Meetings of the Bank, is a pan-African organization created in 1975 under the auspices of the African Development Bank. It is composed of development financiers in most countries on the continent, who act as "very effective liaisons for the Bank," said Guislain.
AADFI Vice-President Lucas Mesos spoke in the absence of the Association's president, Patrick Dlamini. He highlighted the purpose of the workshop, to "reflect on synergies between different institutions in order to be more effective together. This year's entry into force of the African Continental Free Trade Area (AfCFTA) is a justification of our collective will."
The recent ratification of the AfCFTA Agreement is intended to eventually create the largest free trade area in the world, with an integrated market of 1.3 billion people and a total GDP of about $3.3 trillion.
"The reality of regional integration is, above all, economic and social, thanks to the companies that contribute to achieving this integration, with the financial support of development institutions," Guislain said.
Noureddine Zekri, CEO of the Maghreb Bank for Investment and Foreign Trade, agreed: "We only finance the private sector in the five countries of the Maghreb, either directly with small and medium enterprises or by going through banking institutions to which we grant credit lines."
The Bank supports these national or regional financial institutions, which are mostly public, and members of the African Development Bank, by building their capacity, sharing knowledge and experience with them and providing some with direct financing for large-scale projects.
Mohan Vivekanandan, head of the Development Bank of Southern Africa, said: "African governments should make major infrastructure projects involving several countries a priority, as they are crucial for regional integration. Their foremost challenge is to meet deadlines by improving their coordination.
"We need to prioritize both work on technical assistance and long-term financing provisions for these major, complex projects to be achieved."
The African Development Bank strategy for regional integration is based on three main axes: connectivity (transport, telecommunications and power); investment and trade (market liberalization); and the integration of financial systems.
In Africa, 54 financial systems exist side by side, each of which is more or less isolated from the others.
"We must find ways of integrating these financial systems, of enabling the banks to have bigger fields of play than their national markets, of boosting links between capital markets and of developing bond issues at regional level," Guislain said.