Can ‘Africa Club’ be Africa’s magic bullet for reforming the global financial architecture?

The global upheavals triggered by the COVID-19 pandemic and subsequent conflicts in Eastern Europe and the Middle East have intensified the clamor for a reevaluation of the established global financial architecture. Crafted by the Allied powers at the conclusion of World War II, this system has significantly influenced the flow of funds, investments, and financial transactions among nations. However, it has faced criticism for exacerbating the North-South divide and perpetuating global inequalities.

Within Africa, there is a renewed and pressing call for reform based on three pivotal factors: the looming debt crisis, the decline in flows of concessional funds and grants, and the sluggish recycling of Special Drawing Rights (SDRs) to African financial institutions. Sub-Saharan Africa is grappling with an alarming increase in extreme poverty, affecting around 462 million people. Nearly 60% of Least Developed Countries (LDCs) are either in or at risk of debt distress, a substantial surge from the pre-pandemic figure of 39%. And more alarmingly, Africa received only 5% of the $650 billion in Special Drawing Rights (SDRs) allocated by the International Monetary Fund over the past three years, the smallest share among world regions.

In its reports, the World Bank asserts that average incomes in the continent have reduced year-by-year over the last decade, while Africa’s population has grown by 2.4% annually. This confluence of population growth and escalating poverty places significant strain on African governments to adopt alternative policy approaches for capital mobilization. While some countries have endeavored to liberalize their economies, attracting foreign direct investment has proven difficult. Tax-free zones, such as those implemented by Rwanda and Ethiopia, have generated employment but failed to bring about the anticipated systemic transformations.

In response to these challenges, the African Union has demonstrated a heightened commitment to financial reform. In January 2006, Heads of States and Governments of the African Union requested that the African Union Commission conduct a feasibility study on the creation of a Pan-African Stock Exchange (PASE). In February 2009, the African Union Assembly established the African Investment Bank (AIB) to mobilize resources from capital markets inside and outside Africa for the financing and execution of investment projects. The Bank was envisaged as an instrument that could also provide technical assistance in African countries for the study, preparation, financing and execution of investment projects.

Later in 2014, African leaders created the African Monetary Fund (AMF), whose purpose was to facilitate the integration of African economies by eliminating trade restrictions and providing greater monetary integration. The Fund was supposed to pool together central bank reserves and African Union Member States’ national currencies, to boost national sovereignty.

However, both initiatives failed to reach the requisite number of ratifications to enter into force. Additionally, the AU cites inadequate funding for establishing the AU financial institutions, which subsequently hurts the operationalization of the African Monetary Fund that is the first step towards establishing the African Central Bank. The African Central Bank had been previously mooted as a vehicle to promote international monetary cooperation through a permanent institution that will set normalized exchange rates and facilitate financial transactions between member states.

These failures have necessitated a new approach. African multilateral financial institutions recently came together to form the Alliance of African Multilateral Financial Institutions (AAMFI). This framework, also known as the ‘Africa Club’, will bring together all Africa-owned and Africa-controlled multilateral financial institutions including African Finance Corporation (AFC), African Reinsurance Cooperation (Africa Re), African Trade and Investment Development Insurance (ATIDI), Shelter Afrique Development Bank (SHAFDB), and ZEP-RE (PTA Reinsurance Co.), to synergize efforts in promoting sustainable growth and integration aligned with the African Continental Free Trade Agreement (AfCFTA) and Agenda 2063.

The launch of the Africa Club coincides with significant milestones in Africa’s push for global financial reform. Last year, the African Union finally secured a seat in the powerful G20 bloc, while the Loss and Damage Fund was launched on the first day of COP28. Earlier on, the World Bank held its first meeting on African soil in 50 years – resulting in the initiation of significant inclusive reforms. Similarly, the Bridgetown Initiative, championed by Barbados Prime Minister Mia Mottley in 2022 successfully convened 40 world leaders in June to unveil an 18-month roadmap for comprehensive action on global financial architectural reform.

The Africa Club has the potential to upscale these efforts because it has broad ownership and participation by African states. Currently, the AMFIs hold assets worth more than $53 billion and attracted equity investment of over $8.6 billion, primarily from African countries. The alliance’s institutions are also playing a key role in implementing the AfCFTA.

During the historic inauguration on the sidelines of the 37th African Union Heads of States and Governments Summit held in Addis Ababa on 17th and 18th February, Ghana’s President, Nana Akufo-Addo, was among the leaders who reiterated the importance of the Alliance in driving Africa’s economic transformation. “The establishment of the Alliance of African Multilateral Financial Institutions (AAMFI) signifies our collective commitment to surmount financial challenges and propel Africa towards sustainable development. Together, we will harness our strengths and resources to unlock the continent’s boundless potential.”

Meanwhile, Prof. Benedict Oramah, who will Chair the Governing Council of the Alliance added, “African countries have shown resolve to shape our collective financial destiny and AAMFI will stand as a staunch advocate for Africa’s interest in global finance forums, championing equitable treatment and fair representation for the continent.”

Unlike the African Union Financial Institutions, the AAMFI’s mandate goes beyond financial cooperation. The Alliance is structured to facilitate the specific financing needs of African countries and act as a strong voice to advocate for African financial interests and concerns on the global stage. The idea is to catalyze growth across all sectors, notwithstanding agriculture, infrastructure, trade and investment.

However, significant challenges lie ahead that may hinder operationalization of the Alliance. Over the last three years, 93% of AU decisions have not been implemented. As the AU Commission Chairperson Moussa Faki Mahamat bluntly put it in his opening address to this year’s summit: ‘‘The frantic tendency to make decisions without real political will to implement them has grown to such an extent that it has become devastating to our individual and collective credibility.’’

It is also worrying that only seven heads of state participated in the inauguration, even as over 40 of them were attending the summit. There is also domination by a few countries in the value of assets and finances held by the different institutions, partly as a result of limited participation by member states.

The AAMFI will also have to compete against other similar initiatives by China and Russia, which have been leading the push for a new world order. How Africa can secure for itself a voice in this new West-East competition remains to be seen, especially bearing in mind the continent’s bleak financial position.

Crucially, overcoming challenges requires addressing the elephant in the room: political will and governance. The AAMFIs must navigate bureaucratic hurdles and protectionism within member states while also gaining support from the private sector, which holds significant financial power. Navigating these challenges will determine the success of the AAMFI in shaping a more equitable and sustainable financial landscape for the continent.


African Development Bank. AfDB Chief Offers Five Ways for a Fairer Global Financial Architecture with Beneficial Development for Africa. Retrieved February 23rd, 2024, from

African Union. Presidential Dialogue on African Union Financial Institutions; Reforms of the Global Financial Architecture; and the Launch of the Africa Club. Press Release. Retrieved February 23rd, 2024, from

Sheriff Bojang Jnr. Akufo-Addo’s Bold Proposal for African Economic Autonomy. The Africa Report. Retrieved February 23rd, 2024, from


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