The African Development Bank (AfDB) and the Governors of Central Banks in Africa have resolved to strengthen cooperation on a range of issues to curb illegal financial outflows, bolster measures to improve tax collection and exchange information to improve monitoring of domestic financial markets.
The AfDB has also agreed to work with the Governors of the respective Central Banks on incentives to enable them deepen the financial markets using new technologies and innovations. The partnership is also expected to ease access to global markets that would enable more countries to issue long-term sovereign bonds.
AfDB’s Senior Vice-President Charles Boamah told a special session of the Central Bank Governors at the 52nd AfDB Annual Meetings in India that measures to curb the illicit outflow of finance from Africa remain weak and should be addressed.
“There are clearly big challenges which contribute to illicit financial flows. To boost the domestic financial resources, we need major tax reforms and reforms in the global capital markets. There are tremendous efforts that the AfDB is exerting externally and there may be more retail measures required,” said Boamah.
Speaking on domestic resource mobilization, John Panonetsa Mangudya, Governor of Zimbabwe’s Reserve Bank, stressed how export incentives and subsidies for producers of export goods helped to stimulate production and export volumes while measures were taken to cushion the market from the rising dollar.
He explained that though Zimbabwe had resorted to the use of the U.S. dollar as its local currency, the rise of the dollar in recent months led to more expensive prices for the Zimbabwean exports.
The Governor of the Central Bank of Gambia, Bakary Jammeh, noted that The Gambia was seeking urgent cash injection from the AfDB to recover from a political impasse earlier this year. He spoke of declining import cover and diaspora remittances.
Meanwhile, AfDB has pledged joint measures and coordination with the Central Banks to support effective management of the foreign currency remittances from African expatriates and migrant workers who regularly send money home.