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Oramah to Africans: Use African Money to Develop Africa

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CEM REPORT, FINANCE | Harnessing capital from the African continent to develop Africa was once again at the front burner at the Annual Lecture of the Chartered Institute of Bankers of Nigeria held Wednesday at the Civic Center Victoria Island, Lagos.

Prof. Benedict Oramah, President/Chairman, Board of Directors of African Export-Import Bank (Afreximbank), who delivered this year’s lecture; was so emphatic about the continuous begging for grants by African leaders where as a substantial amount of Africa’s money is stashed away in foreign countries.

Prof Oramah considered this year’s topic; “Unlocking the Constraints to Africa’s Economic Transformation: Insights into the Power of Capital’’, as one with huge implication for Africa. This is true since indeed the extent of control of capital determines the extent of development

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Prof Oramah who was proud to be a fellow of the Institute said “The chartered Institute of Bankers of Nigeria has an enviable record of leading the debate on issues that matter to Nigeria and indeed Africa”. Indeed, discussions around capital for Africa development that this topic is crafted to address, has remained central to liberating the black continent from shackles of underdevelopment.

“Without any doubt, capital represents the foundation on which a viable economic transformation can be built and why ownership of capital is necessary, it is its control that provides the sufficient condition for capital to become an effective factor of production that can deliver development”; Prof Oramah said.

A particular statement and as quoted by the guest lecturer, made recently by the President of Ghana, His excellency, President Akufo Addo, aptly captures the entire thought around the lecture. He said; “We in Africa has the manpower, we should have the political will to decide to make Africa work. If we stop being beggars and spend Africa money inside the continent, Africa will not need to ask for respect from anyone, we will get the respect we deserve.”

Prof Oramah said, “although Africa has in foreign reserve of about 500 billion dollars, about half of the continent’s external debts stashed away in foreign banks, the same African countries (owners of this funds) cannot easily borrow them from the same foreign banks holding the resources.

“We should stop the beggar’s attitude; we should spend Africa’s money inside Africa if we hope to achieve prosperity and earn respect before the world”; He added

Three critical questions from the above statement were addressed, which are; first, why are Africans still hooked on grants and begging all the time despite over 60 years of independence? Second why is African money being spent outside Africa?

Prof Oramah said Africa pace of development has proven beyond reasonable doubts that grants cannot finance prosperity, that you cannot spend what you do not control and that ownership of resources does not necessarily translate to control.

Third, why is African banking system dominated by foreign banks and therefore unable to act as an agent of capital accumulation within Africa?

According to the Afreximbank boss, Banks are expected to play a critical intermediation role mobilizing savings from capital surplus entities and deploying them efficiently across board. Foreign banks have been seen to have fallen short of this role.

Prof. Benedict Oramah, therefore proposed creation of a Domestic Financial System that would allow Africa develop. He said: “it is, therefore, important that we build a Domestic Financial System that welcomes foreign banks but which, as a deliberate policy, must have the strong participation of Africa owned banks.’’

Dr Ebenezer Onyeagwu, Chief Executive Officer of Zenith Bank, in his goodwill message challenged Africans to rise up to the responsibility to achieve the restoration that she needed  to prosper, through cooperation.

“Africa needs to wake up. Nobody knows Africa other than Africa, Nobody will take risks in Africa other than Africa, and nobody will know the corners other than us, Africans.

“I think he (Oramah) brought before us a huge challenge in a way, he took a swipe on the banking industry as a major anchor for accumulation and circulation of capital.

“But, I think the banking industry will not be doing this on its own, we need the cooperation of all the stakeholders to achieve this,’’ he said.

Earlier in his welcome address, Dr Ken Opara, President/Chairman of CIBN, noted that unlocking the constraints to Nigeria’s economic transformation is central to unlocking the entire continent since the country is Africa’s biggest economy,

“Currently, Nigeria is considered Africa’s biggest economy, and this is why some people believe that Africa’s chances of prosperity completely lie in the hands of this country.

“As economies around the world continue to struggle with the impact of the COVID-19 pandemic, soaring food and energy prices, surging inflation, debt tightening, climate change, etc., unlocking the constraints to Nigeria’s economic transformation will certainly impact the entire continent.

“As we already know, the African continent represents 20 per cent of the earth’s surface and is home to about 1.3 billion people which will likely reach 2.53 billion people by 2050.

“It boasts of 60 per cent of the world’s arable lands, large swathes of forests, 30 per cent of the world’s reserve of minerals, and the youngest population in the world,’’ he said.

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