The African Central Bank Governors have said appropriate mechanism 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 the Small and Medium Scale Sector.
The group also identified inadequate infrastructure as a serious constraint to Africa’s development.
In a communique presented after its first caucus meeting at the seventh annual joint meeting of AU conference of finance ministers on Sunday in Abuja, the governors said there was urgent need to develop strategies to tackle the issues of inclusive growth and equitable allocation of resources.
In the communique, which was read by the Acting Governor of the Central Bank of Nigeria, Dr Sarah Alade, the governors called for dynamic initiatives that would be designed to actualize Africa’s industrialization for the benefit of the people.
The group said since Africa’s industrialisation required dealing with huge infrastructure deficit, the challenge of pursuing an inclusive industrialisation mandate would be how to promote collaborative infrastructure financing mechanisms.
The communique reads in part, “We observe that the new focus of many central banks, especially after the global financial crisis shifted towards the use of policies that support the real sector and therefore inclusive growth.
“The role of central banks as economic advisers to government should be exploited in the context of promoting domestic and continental industrialization agenda.
“It is important that financing of industrialization is acknowledged as primary objective of the fiscal authority, and for central banks to be recognized and given primary supportive role in achieving it.”
The governors noted that with widespread poverty and unemployment, central banks can use monetary policy, through credit and exchange rate policies to support growth and industrialisation as was one in India, Cambodia and China.
“The disconnect between the financial system and the real sector of the economy has to be addressed if meaningful industrialization is to occur in Africa.
“We renew our commitment to structural transformation of our economies and resolve to intensify and support efforts for inclusive growth and transformative development,” it added.
Meanwhile, the conference of finance ministers at the event requested the secretariat of the African Risk Capacity Agency to develop a proposal for an arrangement by which African governments can gain access to climate financing that would be linked to increased climate volatility.
The group in a resolution passed at the summit also requested development finance institutions and partners to channel their financial support for risk management in Africa through existing African-led institutions.