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EAC Central Bank governors chair leads Africa push for Fair Global Financial System, Intra Africa Trade

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Kenya’s National Treasury and Economic Planning Prof Njuguna Ndung'u (C), Rwanda Central Bank Governor John Rwangombwa (R) and looking on, South Sudan Finance and Economic Planning Minister,Dier Tong Ngor during the East Africa Constituency Ministers and Governors Meeting at IMF Headquarters in Washington DC, USA on April 15, 2023. PHOTO | POOL

Central bank heads from Africa are pushing for a reconsideration of the global lending system to assist developing nations tackle myriad of challenges as they grapple with debt crises.

The three-day caucus by Central Bank governors is also expected to address intra-African trade as a crucial catalyst for sustainable economic growth and to prepare input for the International Monetary Fund (IMF) and World Bank's annual meetings to be held in Washington in October this year.

“The primary goal of the meeting is to address intra-African trade as a crucial catalyst for sustainable economic growth and to prepare input for the IMF and World Bank’s annual meetings,” said the organisers ahead of the conference in a brief.

Kenya’s President William Ruto set the stage in June this year when he termed the global lending system as “unfair and punitive”.

“Currently, poorer countries have to pay as much as eight times more in interest rates than rich nations because they are profiles a s risky,” Dr Ruto said during a conference in Paris, France.

Nigerian Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who is also the Governor of IMF and the World Bank Group (WBG) for the Federal Republic of Nigeria and Chair of the 2024 African Caucus will host the event to be held in Abuja from August 1st to 3rd.

East African Community Monetary Affairs Committee (EAC) chairman and Bank of South Sudan Governor Dr James Alic Garang, who is credited with presiding over major reforms to integrate the world's youngest country's financial system, is among the notable keynote speakers.

He is set to speak on his experiences with the complex global set-up as he navigates the task of integrating the country's financial system into the complex global order during the 2024 African Caucus Meeting.

“Undoubtedly, several issues top our regional and global agenda today, including the realization that our planet faces unprecedented existential threats, that poverty is on the rise and that geo-economics fragmentation is on the upswing.

“Before the dust of post-Covid-19 pandemic era settled, new threats emerged, emanating from both negative humankind activity and natural calamities,” said the former IMF advisor.

To give Africa a fair chance to turn its immense potential into opportunity, African political and economic leaders have called for the transformation of the international financial architecture and tap on the vast human, mineral and agricultural potential.

According to United Nations figures, in 2023, global public debt reached $313 trillion, a situation particularly alarming in developing economies.

Over a fifth of the tax revenue in 25 developing countries went towards servicing external debt, while extremely high borrowing costs left developing countries with about 3.3 billion people in total – around 40 per cent of the global population – spending more on interest payments than on health or education initiatives.