Lenders lobby welcomes AU decision on creditor status

The Alliance of African Multilateral Financial Institutions (AAMFI) has welcomed an endorsement by African Union (AU) ministers of finance and Central Bank governors.

Speaking at their seventh ordinary session of the AU's Specialised Technical Committee (STC) meeting on finance, monetary affairs, economic planning, and integration, the ministers said AAMFI envisaged to become a powerful negotiating body that will improve Africa’s position in the global financial system.

This was during the third meeting of its Governing Council on the margins of the AU meeting held in Accra, Ghana.

"The STC Ministerial declaration and decisions reflect the role of African AMFIs in the continent's financial architecture," they said in a statement.

During the meeting, the AAMFI received key support from the AU and was recognised by the specialised technical committee as crucial for strengthening the continental financial framework and advancing the African Union’s Agenda 2063.

The ministers and Central Bank governors committed to enhancing the capital and credit ratings of AMFIs to mobilise essential funding for Africa's growth.

They however expressed concerns over recent reports questioning the preferred creditor status of AMFIs, emphasizing its importance in engaging with credit rating agencies and securing development financing.

The ministerial declaration affirmed the importance of the rights conferred on AMFIs by African governments, noting that it is crucial for reducing borrowing costs and deepening capital markets.

The ministers and Central Bank bosses urged AU member States to uphold their commitments to AMFIs and respect their treaty obligations. They recommended that the AU Assembly mandate the African Union Commission (AUC) to work with AAMFI in engaging key stakeholders, including the G20.

The ministers rooted for the establishment of AU financial institutions, including the African Monetary Institute and the African Financial Stability Mechanism.

The AMFIs, established by African States have proven to be responsive in times of crisis, and are commercially sustainable, generating profits and investment returns for shareholders while fulfilling their important development mandates.

AAFMI was co-founded by the African Trade and Investment Development Insurance, African Export-Import Bank, Shelter Afrique Development Bank, Trade and Development Bank, Africa Finance Corporation, African Reinsurance Corporation,  and Zep-Re PTA Reinsurance Company