Nigeria’s President, Muhammadu Buhari, on Thursday charged African Central Banks to halt the growing trend of laundering stolen funds, terrorism financing and illicit outflow of funds from the continent through the banking system.
President Buhari was speaking here when he declared open the 39th Ordinary Meeting of the Association of African Central Banks (AACB), being hosted by the Central Bank of Nigeria (CBN).
President Buhari maintained that monetary policy “is not an end in itself” but that the association must ensure that monetary policies are complemented with fiscal policies to achieve economic development and help liberate the continent from poverty challenges.
He also charged them to look for original home-grown solutions and not rely on “fit for all purposes” prescriptions handed down from abroad.
According to President Buhari, “The banking system across the continent has an important role to play in the fight against corruption. Most stolen funds have contact with the banking system. African financial architecture has become a veritable tool for laundering stolen funds. This Association, with the cooperation of all member countries, could be an important machinery for fighting money laundering and illicit flow of funds.
“One of the cardinal objectives of the Association should be the prevention of money laundering, terrorist financing and illicit flow of funds out the continent. I urge you all as Governors of Central Banks and the major regulator of the financial system to intensify your surveillance and propose policies that would guide the operations of our financial institutions and reverse the trend of illicit flow of funds out of Africa.
“You should also join the campaign and put in measures to ensure that the proceeds of these illicit flows are repatriated to their countries of origin.”
President Buhari expressed concern about the current economic challenges confronting the continent which hinders financial stability and growth even as he canvassed that the banking sector should complement its monetary policies with fiscal measures to stimulate growth.
Saying that the region is confronted with several global and domestic economic challenges, President Buhari said that most worrisome is the slowdown in growth; weakening global aggregate demand; rising inflation; capital flow reversals as a result of tapering in the United States; rising debt levels; increased exchange rate volatility and depleting external reserves due to dependence on primary commodity exports.
He said, “This is a critical moment for sub-Saharan Africa, which is facing slowing growth after 10 years of unprecedented growth. The region suffered a sharp slowdown, owing to slump in commodity prices and softer global economic conditions. Natural resource producers such as Nigeria, Angola, South Africa, and Mozambique have been hit the hardest. We have also had to contend with the effect of the Ebola Virus Disease which struck some countries in the West-African Sub-region.
“China, a major trade and business partner to a number of African countries is currently slowing as it re-models its economy, sparking fears of further weakening. Monetary policy must be complemented with fiscal and other policy measures. Therefore, strong coordination between monetary and fiscal policy is extremely important. Given the daunting challenges confronting our economies, monetary and fiscal policies should open new frontier on the fastest and most efficient strategies for diversifying our economies.”
With the theme: “Unwinding Unconventional Monetary Policies: Implications for Monetary Policy and Financial Stability in Africa”, the meeting is expected to discuss avenues through which African Central Banks can unwind the impact of unconventional policies so that monetary policy can return to its core function of stabilizing short term prices.
By the Statutes of the Association (as amended at Kampala, Uganda, on August 19, 2003), its objectives are: to promote co-operation in the monetary, banking and financial spheres in the African region; assist in the formulation of guidelines along which agreements among African countries in the monetary, banking and financial fields shall be reached; as well as help in strengthening all efforts aimed at bringing about and maintaining price stability and financial stability in the African region.
The others are to examine the effectiveness of international economic and financial institutions in which African countries have an interest and suggest ways of possible improvement; and envisage, following a well-timed and sequenced convergence process, the advent of a single currency and a common central bank in Africa.
Currently, the Association is collaborating with the African Union in formulating and implementing the African Monetary Cooperation Programme (AMCP).
A host of international speakers from the academia, central banks and government circles are expected to share both theoretical and practical experiences with the Assembly.
The Association of African Central Banks was formed on May 25, 1963, at the summit of African Heads of State and Government in Addis Ababa, Ethiopia.
Nigeria is hosting this meeting for the first time in 17 years.
