African Central Banks have decried current intervention efforts by various countries to boost industrialisation as being ineffective.
The African central bankers stated this in the communiqué in Abuja at the end of over week meeting in which they criticized interventions and described it as “not developed within an overarching national mandate for industrialization.”
The central bankers also expressed concern that despite the increasing growth in diaspora remittances to Africa and the accompanying capital flows, “these have not been fully harnessed to finance industrialization, especially SMES.”
However they agreed that how well they manage price and financial stability will promote inclusive industrialization and growth for the continent.
They also endorsed the position of the Acting governor of the Central Bank of Nigeria (CBN) Dr Sarah Alade that the mandate of African central banks should be extended to include critical development roles to support fiscal authorities “within a macroeconomic policy framework.”
Other recommendations made by the apex bankers was that central banks must not lose sight of their core mandate in the pursuit of developmental objectives and that given the extent of poverty and unemployment on the continent, central banks should use their monetary policies (credit and exchange rates) to support growth and industrialization as is done in India, China and Cambodia.
It was also agreed that the disconnect between the financial system and the real sector of the economy would have to be addressed if meaningful industrialization is to occur in Africa.
In addition, they submitted that “appropriate mechanisms should be established to tap into various sources of capital such as: diaspora remittances, pension funds, sovereign wealth funds and excess foreign reserves, to finance SMES and industrialization.” It was suggested that the Nigerian diaspora bond initiative could be replicated across the continent.
