As capital becomes increasingly selective and risk pricing has tightened, strengthening regional financial institutions and more disciplined development borrowing dominated the 24th Annual General Meeting of the ECOWAS Bank for Investment and Development held in Accra.
The keynote address, delivered by Presidential Advisor on the Economy Seth Terkper on behalf of President John Dramani Mahama, stated the meeting was opportune because the global financial architecture is shifting.
EBID, he noted, must evolve. “The Bank must move from being a supporting bank to a systems-driven one and move from modest billions into the upper balance of billions of dollars.”
West Africa’s transformation must be financed increasingly from within the region, with capital realigned from a bank of support to a bank of scale, he added.
The COVID-19 pandemic and its disruption of supply chains, the Russia-Ukraine war and energy and food price spirals it unleashed are worthy examples demonstrating the need to prepare for a crisis and not respond only during the crisis itself.
These external shocks elevated public debt, weakened currencies and constrained fiscal space, ultimately leading to the debt exchange and restructuring that reshaped the country’s financial sphere.
Now the US-Iran military conflict, which triggered what the International Energy Agency described as the largest supply disruption in the history of the global oil market, has sent Brent crude surging.
In light of the above, Terkper called for greater deployment of domestic instruments – municipal and local-currency bonds in particular – and for private capital to be crowded in through deeper partnerships with regional stock exchanges and leading local companies, rather than recycling financing obligations outward to external creditors.
In spite of a strong performance report, EBID’s obligations have yet to be fully fulfilled. For instance, only four member-states – namely, Ghana, Côte d’Ivoire, Guinea and Togo – have currently fully met their obligations.
Thus, outstanding arrears still stand at approximately US$256million. Dr. Cassiel Ato Forson, Finance Minister and outgoing Chairman of the EBID Board of Governors, cautioned that timely capital payments are critical. They strengthen EBID’s leverage and sustain its growth and impact across the region.
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