President/Chairman, Board of Directors of African Export-Import Bank (Afreximbank), Prof. Benedict Oramah has proposed 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 with the theme: “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.”
The Afreximbank boss said, however, that while there was a need to welcome foreign banks, the space must not be completely ceded to them if we (Africans) hoped to drive development in our desired direction.
Oramah questioned why Africans were still hooked on grants and begging all the time, despite over 60 years of independence.
He also wondered why Africa’s money was being spent outside Africa and by who.
He said although Africa had about $500 billion, that is about half of Africa’s external debts today, stashed away in foreign banks but the same countries (African countries) could not borrow from the same foreign 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, had made it impossible for Africans to borrow from the same foreign banks holding the resources.
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.”
Chief Executive Officer of 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 Africa, nobody will take risks in Africa other than Africa, 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.
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 was 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 were 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 potentials.