President Nana Addo Dankwa Akufo-Addo has noted that Africa’s dependence on foreign capital is both risky and costly. He said the over-reliance on foreign capital has resulted in huge financial leakages through high-interest rates for defaulting countries, among others. Speaking at Afreximbank’s 30th Annual Meeting held in Accra, Monday, June 19, 2023, he indicated that this problem could be solved if African economies develop strong financial institutions across the continent. President Akufo-Addo said, “The reality is that unless we have strong financial institutions, we are not going to develop. As we have learned over the past decades, relying on foreign capital is both risky and costly. It has resulted in huge financial leakages through the high cost of defaulting in borrowing and interest rate payments and undermines the growth of our financial institutions, domestic resource mobilization, and private sector development through the cost of funds.” “The ownership of our financial institutions should be strengthened over time to enhance continuous development and relevance,” he added. He stated that capital and effective coordination with the African Union were the two interventions needed to strengthen the development of Africa’s financial institutions. President Akufo-Addo said, “Regarding the first set of interventions capital, I want to reiterate that despite consistent efforts made by many African governments including during extremely difficult macroeconomic and global operating environments, our development financial institutions remain highly undercapitalized.” He however lauded Afreximbank for being a relevant financial institution on the continent. Meanwhile, it would be recalled that the government on July 1, 2022, announced its decision to engage the International Monetary Fund (IMF) for a $3 billion financial bailout programme. Subsequently, a team from the IMF arrived in the country from July 6 to July 13, 2022, to engage Ghanaian authorities for a possible economic support programme. A staff-level agreement between the Government of Ghana and the IMF was reached in December 2022. On May 17, 2023, IMF’s executive board approved Ghana’s $3 billion loan facility. The IMF programme, according to the government is aimed at restoring macroeconomic stability and safeguarding debt sustainability among many others.
Relying on foreign capital risky and costly – Akufo-Addo
