EAC Central Bank bosses push for fair intra-Africa trade, global financial systems

East African Central Bank Governors are set to converge in Abuja, Nigeria this week, with the push for deeper intra-African trade and change in the global financial architecture, which is presently skewed against the continent, topping the agenda.

The African Caucus, whose primary goal is to address intra-African trade as a crucial catalyst for sustainable economic growth and to prepare input for the International Monetary Fund (IMF) and World Bank's annual meetings to be held in Washington DC in October this year.

This year's meeting comes against the backdrop of a sustained campaign for a relook at the global financial system, which African economic leaders agree favors developed economies to the detriment of developing countries, many of which are grappling with debt crises.

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The 2024 African Caucus Meeting is hosted by the Nigerian Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who is also the Governor of the International Monetary Fund (IMF) and the World Bank Group (WBG) for the Federal Republic of Nigeria and Chair of the 2024 African Caucus.

“The primary goal of the meeting is to address intra-African trade as a crucial catalyst for sustainable economic growth and to prepare input for the IMF and World Bank’s annual meetings,” said the organizers ahead of the conference in a brief.

Among the notable keynote speakers at the Abuja meeting is Bank of South Sudan Governor Dr James Alic Garang, who is credited with presiding over major reforms to integrate the world's youngest country's financial system. Kenyan Bank officials will also be represented at the crucial meeting.

Dr Alic who is the current chairman of the East African Community Monetary Affairs Committee (EAC) is set to speak on his experiences with the complex global set up as he navigates the task of integrating the country's financial system to the complex global order.

“Undoubtedly, several issues top our regional and global agenda today, including the realization that our planet faces unprecedented existential threats; that poverty is on the rise; and that geoeconomic fragmentation is on the upswing. Before the dust of the post-Covid-19 pandemic era settled, new threats emerged, emanating from both negative humankind activity and natural calamities,” earlier said the US trained economist and academic don who previously worked with the International Monetary Fund and the World Bank in various capacities before assuming his current Central Banker role for Africa’s youngest country.

“It goes without saying that effects of climate change-floods and droughts-and geopolitical conflicts, for instance, pose significant risks and challenges for the conduct of monetary policy across the globe.”

The push for a fair global financial system is a pet project for Dr Alic as well as other African economic and political leaders including President William Ruto of Kenya, African Development Bank (AfDB) President Akinwumi Adesina, Africa Export-Import Bank (Afreximbank) President Prof Benedict Oramah and United Nations Secretary-General Antonio Guterres who have spared no opportunity to talk about it during various forums within the continent and without.

 The African Political and Economic leaders have for instance called for a shift of the tendency of the international financial system to label Africa as a risky borrower despite its vast human, mineral and agricultural potential, and has called for the transformation of the international financial architecture to give Africa a fair chance to turn its immense potential into opportunity.

Since assuming his position in October 2023, Dr Alic has spearheaded a transformative modernization plan for the Bank of South Sudan. This plan focuses on Enhanced Transparency.

He has boosted efforts to increase openness and accountability within the bank's operations to build public trust.

He has also led to the Restructuring the Bank of South Sudan to better deliver on its mandate and exercise stronger oversight of the financial sector.

According to United Nations figures, in 2023, global public debt reached $313 trillion, a situation particularly alarming in developing economies.

Over a fifth of the tax revenue in 25 developing countries went towards servicing external debt, while extremely high borrowing costs left developing countries with about 3.3 billion people in total – around 40 per cent of the global population – spending more on interest payments than on health or education initiatives.

The African Caucus was established in 1963, with the objective of strengthening the voice of African Governors in the Bretton Woods Institutions (BWIs), i.e. the International Monetary Fund (IMF) and the World Bank Group (WBG), on development issues of particular interest to Africa.

Membership to the Caucus is open to all African Countries who are members of the IMF and WBG, currently all the 54 countries on the African continent.

The countries are represented by their respective Governors at these institutions, commonly referred to as the African Governors, who are usually Ministers of Finance and Economic Development, and Central Banks Governors.

Views and concerns of African Governors are conveyed to the heads of the BWIs through a Memorandum and that is done annually at the Annual Meetings of the two institutions.

The African Caucus meets twice yearly; first, in the host country of the Chairperson of the Caucus and secondly, at the venue of the Annual Meetings of the IMF and WBG.

The African Development Bank's (AfDB) President, Dr Akinwumi Adenisa, has also echoed the need for reforms, noting that Africa needs $1.3 trillion annually if it is to meet its sustainable development needs by the end of this decade in 2030, but this cannot happen without a more responsive, inclusive and accountable international financial system to support the acceleration of global development.

Veteran Cameroonian lawyer Augustine Njamnshi has also called for the creation of "fair and equitable financial structures that are adapted to the challenges and opportunities which Africa faces," and stressed that "it is possible for us together to influence these reforms and create a financial environment that is conducive to sustainable development."