Africa’s weapon against global financial turmoil is financial consolidation – AU

African finance ministers are due for a brainstorming meeting at which they are expected to discuss the consolidation of the continental financial markets to effectively tackle the global financial crisis.

The African Union (AU) is convening the meeting of Africa’s finance experts, central bank governors, capital market authorities and regulators, to discuss economic integration as a weapon against the global economic slowdown.

The ministers in charge of finance and economy are expected to convene in Addis Ababa, Ethiopia, to discuss the economic integration and the creation of the three financial institutions planned by the AU at the meeting on 14 January, the AU said.

The three financial institutions at various stages of formulation are the African Central Bank, the African Monetary Fund, to be based in Cameroon and the African Investment Bank, which is still in the works.

“The extra-ordinary conference is expected to design and device regional responses to mitigate the financial crisis and reduce its impacts on growth and trade,” the AU Commission said in a statement Friday.

According to the AU its opinion is that for the African continent to effectively battle against the global financial crisis, measures must be taken to cushion various countries from the looming lack of sources of international debt and credit.

African countries, buoyed by favourable credit ratings from the world’s leading rating agencies, the Standards and Poors, were at various stages of launching sovereign bonds at various European capitals to bolster their economic credentials.

Kenya, Tanzania, Zambia and Ghana were amongst the various states at various stages of launching such bonds but these plans have been facing serious setbacks following the waning confidence on the world’s credit markets.

The African Union’s Economic Affairs division, said Friday it considered the set ting up of the various African financial institutions sufficient fallback position against the drastic effects the global financial crisis might have on the continent.

AU said given the prevailing serious international financial situation and its negative impact on Africa’s economic growth, development financing, debt and international trade, both in industrialised countries and in other parts of the world , the meeting is crucial in providing a way forward on how to deal with the crisis .

“The Economic Affairs Department, is convinced that speeding up the economic integration process through the establishment of the African Financial Institutions is one of the most appropriate responses that could offer member states the tool to face up to the crisis.”

The African ministers of economy and finance will therefore meet to deliberate o n issues affecting the continent’s economic, social and political development, it added.

Source: African Manager

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