The African Union Development Agency-New Partnership for Africa’s Development (AUDA-NEPAD) has sounded the alarm, stating that Africa needs to address a USD 3.3 trillion financing deficit in the next ten years. Speaking at the 37th AU summit in Addis Ababa, Nardos Bekele, CEO of AUDA-NEPAD, emphasized the urgency of increasing resource mobilization efforts to bridge this gap.
AUDA-NEPAD has completed the continent’s development plan for the upcoming decade, marking the second of several ten-year plans under the AU’s Agenda 2063. Nardos Bekele stressed the importance of coordination and investment alignment at national, regional, and continental levels to prevent resource wastage and ensure effective utilization of funds.
The CEO also highlighted the need for robust efforts to meet the USD 3.3 trillion financing shortfall. AUDA-NEPAD is working on developing mechanisms to mobilize funds through national initiatives, Regional Economic Communities (RECs), and continental levels.
The ongoing AU summit is set to address the establishment of AU Financial Institutions, including the African Central Bank, the African Monetary Fund, and the African Investment Bank, with the aim of streamlining the continent’s financial systems.
The African Union has long advocated for an African Monetary Union and the establishment of the African Central Bank, the African Monetary Fund, and the African Investment Bank. However, challenges such as inadequate funding and the evolving global economic landscape have delayed the operationalization of these institutions.
To address the financing challenges, African Multilateral Financial Institutions (AMFIs) are working in collaboration to establish the Alliance of African Multilateral Financial Institutions (AAMFI), also known as the Africa Club. This alliance aims to find solutions to financing challenges and support Africa’s economic development and integration objectives.
The 37th AU summit, which commenced on February 17, 2024, will deliberate on the establishment and operationalization of AU financial institutions. It is crucial for Africa to strengthen its financial architecture and boost collaboration to secure sustainable economic development across the continent.
