Representatives of seven international finance institutions (IFIs) have vowed to increase collaboration and improve co-ordination to accelerate the development of local capital markets and increase access to local currency finance in emerging markets.
On the sidelines of the 2013 Spring Meetings of the World Bank Group-International Monetary Fund (IMF) in the United States capital, Washington, D.C., senior officials of the African Development Bank (AfDB), Asian Development Bank, European Bank for Reconstruction and Development, European Development Finance Institutions, Inter-American Development Bank, International Bank for Reconstruction and Development, and the International Finance Corporation (IFC) discussed collaboration on specific initiatives to promote local capital markets and local currency financing.
Earlier, the Secretary General of the United Nations, Mr Ban Ki-moon, called on developed nations to discharge the pledges to facilitate progress towards the achievement of the Millennium Development Goals (MDGs).
In Ghana, shortfalls in grants from development partners amounting to GH¢389.4 million (0.5 per cent of country’s GDP) conspired with other factors to trigger a fiscal deficit of GH¢8.64 billion, equal to 12 per cent of the total value of goods and services produced within the economy during the year, as Gross Domestic Product (GDP).
This means that foreign financing of the budget was GH¢1.6 billion (equivalent to 2.2 per cent of GDP), against a target of GH¢1.9 billion or 2.7 per cent of GDP).
The Minister of Finance and Economic Planning of Nigeria, Mrs Ngozi Okonjo-Iweala, said at the African Ministers press briefing at the ongoing Spring Meetings in Washington DC that sub-Saharan Africa (SSA) had experienced unprecedented growth over the past 10 years and it needed all the financial resources and international partnership to expand infrastructure to build much stronger regional connectivity and markets to ensure that the growth was sustained and included the poor.
The officials of the international finance institutions, on behalf of their organisations, pledged a continued commitment to the development of local currency finance and capital markets through collaboration on direct market participation, policy dialogue, advisory assistance, and advocacy.
They also affirmed a joint aspiration to accelerate the development of local currency finance and emerging capital markets by leveraging the expertise and experience of each institution, and by coordinating efforts when this can achieve greater impact.
“A thriving private sector is a key driver of economic growth and jobs. Access to financing, and local currency finance in particular, is one of the biggest challenges for the private sector in developing countries,” said the IFC Vice President and Treasurer, Jingdong Hua.
He added that “providing such access through deep and resilient local capital markets is essential to achieving sustainable economic growth and shared prosperity.”
Story: Samuel Doe Ablordeppey
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