The President/Chairman, Board of Directors of African Export-Import Bank (Afreximbank), Prof. Benedict Oramah, has proposed the creation of a Domestic Financial System that would allow Africa develop, prosper and earn respect.
He made the proposal at the Chartered Institute of Bankers of Nigeria (CIBN) Annual Lecture, themed: “Unlocking the Constraints to Africa’s Economic Transformation: Insights into the Power of Capital,” on Wednesday in Lagos.
According to him, Africa may be rich in natural resources, however, leveraging that wealth is determined by those who control the capital required to bring them to market.
He 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.”
As a result, he said there is a need to welcome foreign banks, as the space must not be completely ceded to them if we (Africans) hoped to drive development in our desired direction.
Oramah questioned why Africans are still hooked on grants and begging all the time, despite over 60 years of independence, and why Africa’s money is being spent outside the continent.
He noted that although Africa had about $500 billion, that is about half of Africa’s current external debts, and monies stashed away in foreign banks but the same countries (African countries) could not borrow from the same banks holding the resources.
He said the excuses of compliance complication and country risk constraints that were hardly mentioned when the funds were being deposited make it impossible for Africans to borrow from such banks.
Oramah said: “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.
“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.”
Without any doubt, capital represents the foundation on which a viable economic transformation can be built and why ownership of capital is necessary.
Africa’s restoration
The Chief Executive Officer, Zenith Bank, Dr Ebenezer Onyeagwu, said in his goodwill message that for Africa to achieve the restoration that she needed to prosper, she would require the cooperation of all stakeholders.
“Africa needs to wake up. Nobody knows Africa other than Africans, Nobody will take risks in Africa other than Africans, 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,” he said.
The President/Chairman of CIBN, Dr Ken Opara, noted that unlocking the constraints to Nigeria’s economic transformation would certainly impact the entire continent as the country is considered Africa’s biggest economy.
“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.
“As we already know, the African continent represents 20 per cent 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 per cent of the world’s arable lands, large swathes of forests, 30 per cent of the world’s reserve of minerals, and the youngest population in the world,” he said.
Opara said despite these riches and impressive demography, many 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.
According to him, failure to tackle these issues can deprive a generation of Africans the opportunities to maximise their potential.
The News Agency of Nigeria (NAN) reports that the highlight of the event was the CIBN execution of collaboration Memorandum of Understanding with Afreximbank Academy, to run joint Capacity Building and Certification programmes in the area of Trade and Finance. (NAN)
