Essence of Afreximbank’s proposed ‘Domestic Financial System’ for Africans -Board Chair

*Prof. Benedict Oramah, President/Chairman of Board of Directors of Afreximbank, in Lagos, stresses it is important the  continent builds a Domestic Financial System that welcomes foreign banks with strong participation of Africa-owned banks for inclusive prosperity

Isola Moses | ConsumerConnect

In its effort at overcoming extant constraints of needed capital hindering Africa’s sustainable socio-economic transformation, the African Export-Import Bank (Afreximbank) has proposed creation of a ‘Domestic Financial System’ to allow Africa develop, prosper and earn respect in the comity of nations.

Prof. Benedict Oramah, President/Chairman, Board of Directors of Afreximbank, made the proposal at the Chartered Institute of Bankers of Nigeria (CIBN) Annual Lecture held Wednesday, March 29, 2023, in Lagos.

The theme of this year’s lecture is, “Unlocking the Constraints to Africa’s Economic Transformation: Insights into the Power of Capital’’.

Oramah stated Africa might be rich in natural resources, however, leveraging that wealth is determined by those who control the capital required to bring them to market, agency report said.

The President/Chairman of Afreximbank Board said: “It is, therefore, important that we build a Domestic Financial System that welcomes foreign banks but which, as a deliberate policy, must have the strong participation of Africa-owned banks.’’

The Chairman, however, noted though there is a need to welcome foreign banks, the space must not be completely ceded to them if we (Africans) hope to drive development in our desired direction on the continent.

The Bank as well interrogated why Africans are still hooked on grants and begging all the time, despite over 60 years of Independence from the colonial masters.

He also wondered why Africa’s money is being  spent outside Africa and by who.

According to him, although Africa has about 500 billion Dollars, that is about half of Africa’s external debts stashed away in foreign banks, the same African countries could not borrow from the same foreign banks  holding the resources.

Oramah further disclosed the excuses of compliance complication and country risk constraints that were hardly mentioned when the funds were being deposited, had made it impossible for Africans to borrow from the same foreign banks holding the resources.

“It is in the context of this foregoing that the topic of today’s lecture ‘Unlocking the Constraints to Africa’s Economic Transformation: Insights into the Power of Capital’’, is apt and opportune,” stated he.

Oramah said: “Without any doubt, capital represents the foundation on which a viable economic transformation can be built, and why ownership of capital is necessary, it is its control that provides the sufficient condition for capital to become an effective factor of production that can deliver development.”

In his goodwill message on the occasion, Dr. Ebenezer Onyeagwu, Chief Executive Officer (CEO) of Zenith Bank Plc, said for Africa to achieve the restoration that the Black continent needs  to prosper, it would require the cooperation of all stakeholders.

Onyeagwu noted: “Africa needs to wake up. Nobody knows Africa other than Africa, Nobody will take risks in Africa other than Africa, and nobody will know the corners other than us, Africans.

“I think he (Oramah) brought before us a huge challenge in a way, he took a swipe on the banking industry as a major anchor for accumulation and circulation of capital.

“But, I think the banking industry will not be doing this on its own, we need the cooperation of all the stakeholders to achieve this.”

Also speaking at the event, Dr. Ken Opara, President/Chairman of CIBN, stated that unlocking the constraints to Nigeria’s economic transformation would certainly impact the entire continent as the country is considered Africa’s biggest economy.

He said: “Currently, Nigeria is considered Africa’s biggest economy, and this is why some people believe that Africa’s chances of prosperity completely lie in the hands of this country.

“As economies around the world continue to struggle with the impact of the COVID-19 pandemic, soaring food and energy prices, surging inflation, debt tightening, climate change, etc., unlocking the constraints to Nigeria’s economic transformation will certainly impact the entire continent.”

The CIBN President noted: “As we already know, the African continent represents 20 percent of the earth’s surface and is home to about 1.3 billion people which will likely reach 2.53 billion people by 2050.

“It boasts of 60 percent of the world’s arable lands, large swathes of forests, 30 percent of the world’s reserve of minerals, and the youngest population in the world,’’ he said.

Opara stated despite these riches and impressive demography, several African countries are still characterised by widespread poverty and inequality, coupled with mixed effects of limited access to quality education, health, nutrition, technology and innovation.

Failure to tackle these issues can deprive a  generation of Africans the opportunities to maximise their potential, he added.

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