Africa’s dependence on foreign capital markets is risky and costly – Akufo-Addo

President Nana Addo Dankwa Akufo-Addo has underlined the risks associated with African nations solely depending on foreign capital markets.

In a speech to pay tribute to the contribution of the Africa Export and Import Bank, President Akufo-Addo said it was important for Africans to build their indigenous financial institutions to achieve economic growth.

President Akufo-Addo posits that this can be done through domestic resource mobilisation and private-sector development.

He explained the drawbacks of depending on foreign capital, citing financial leakages, high borrowing rates, and interest payments as critical issues.

According to him, such reliance undermines domestic financial institutions’ growth and hampers African economic development.

President Akufo-Addo urged his fellow African leaders to prioritise establishing strong financial institutions to foster prosperity across the continent.

“Unless we have strong financial institutions, we are not going to develop. We have learnt over the decades that relying on foreign capital is both risky and costly. It has resulted in huge financial leakages to a high cost of default-driven borrowing rates and interest payments and undermine the growth of our financial institution’s domestic resource mobilisation and private sector development,” President Akufo-Addo said.

He outlined some interventions that African leaders should embrace to overcome the current economic challenges, emphasising the importance of capitalisation and effective coordination with the African Union.

“There is capital and effective coordination with the African Union. Despite constant efforts made by many African governments during an extremely economic global operating environment, our economic financing institutions remain highly under-capitalised,” the President noted.