Director of the Programme
South African Reserve Bank Governor, Mr Lesetja Kganyago
Association of African Central Banks (AACB) Chairperson, and Governor of the Central Bank of Nigeria, Mr Godwin Emefiele
AACB Vice Chairperson
Representative of the African Union Commission Chairperson
Heads of Central Banks
Representatives from the International Monetary Fund and the World Bank
Senior officials from the Banking and related sectors
Academics
Esteemed guests,
Ladies and gentlemen
It is a great honour and pleasure to welcome you to South Africa.
You have assembled here to hold the 40th Annual Meetings of the Association of African Central Banks (AACB).
This is indeed a major milestone for this organisation. It is a time to reflect, take stock of achievements and consider the next steps on the path to promoting economic development on the continent.
The last time the Association of African Central Banks hosted its meetings in South Africa was on 16 August 2001.
Less than a month later, the 9/11 tragedy occurred, which negatively affected confidence levels, financial market developments, and growth prospects across the world, Africa included.
This gathering occurs at the time when the global economy is still trying to shake off some of the negative legacies of the global financial crisis.
In 2008, the world faced the worst financial crisis since the Great Depression of the 1930s. International financial markets went into turmoil and many countries encountered deep economic recessions.
The international community has since endeavoured to put measures in place to restore sustainable global growth and strengthen the international financial system by reforming international financial regulations.
While evidence suggests that much has been achieved to date through coordination and cooperation, vigilance is still needed to ensure that the growth momentum is maintained and financial markets are resilient.
African economies are integrated into the global economy and as such we are forced to bear the brunt of adverse international economic developments.
This meeting provides an excellent opportunity for the exchange of ideas around the role that central banks can play to address deficiencies and constraints so as to enhance growth in the different African regions.
The Association has come a long way since its establishment on 25 May 1963 at the Summit Conference of African Heads of State and Governments in Addis Ababa, Ethiopia. The founding principle of this organisation is to further the integration process in Africa.
Integration has many objectives, spanning across the political, social and economic spheres.
The Abuja treaty that was signed in 2004 committed Member States on the continent to harmonise their economic, monetary, financial and payments policies, in support of economic integration on the continent.
The different regions on the Continent have continued to pursue these goals. While the progress to date has not been in line with expectations, we remain committed to the aspirations as set out in the Abuja Treaty.
I would like to encourage you to give more focussed attention to the role that central banks and monetary policy could play in our pursuit of the goals as set out in the Treaty.
Central Banks have an important role to play in promoting inter-continental trade, linking the payments systems across the continent, developing a well-functioning and efficient banking system, promoting cross-border banking and capital flows.
Apart from improving integration, these objectives also underpin sustainable and inclusive economic development and will contribute to the eradication of poverty on the continent.
In 2013, the African Union adopted Agenda 2063 which strongly promotes economic integration across the continent.
Agenda 2063 is premised on the view that a prosperous Africa is based on inclusive growth, sustainable development; good governance and a strong focus on regional integration.
By reducing fragmentation and spatial exclusion, Africa can realise its substantive potential for sustainable and inclusive growth.
Integration into the continental and global trade and economic networks is crucial for the development of the continent.
However, the recent move towards more protectionist policies by some developed countries could have implications on the pace of globalisation going forward.
According to the African Development Bank[1], intra-continental trade increased from approximately 10 per cent in 2000 to around 15 per cent of total African trade in 2016.
While this improvement is to be commended, this is still very low by international standards. African countries need to diversify their relations by expanding their economic and trade links with other countries on the continent.
There is little doubt that expanding trade among African countries can provide a strong foundation for sustainable economic development on the continent.
It is for this reason that the Heads of State and Government of the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Southern African Development Community (SADC) launched the Tripartite Free Trade Area (TFTA) in 2015.
An efficient payment system that allows for timely and cost effective cross border payments has a critical role to play in promoting regional trade.
A well-functioning payment system is also crucial for the transfer of migrant remittances which has become a major source of external finance for Africa.
During 2016, remittance flows accounted for over half of total private flows in Africa.[2] We count on the central banks to assist with the development of the payments systems across the continent that would assist in this regard.
It is now generally accepted that growth will not be sustainable if it is not inclusive. Financial inclusion is an important pillar of inclusive growth.
The cutting edge innovations on the continent in financial services and mobile payments in particular, have gone a long way in promoting financial inclusion in Africa.
The role that central banks can play in ensuring that the financial system adequately caters for financing for SME development is also crucial in promoting financial inclusion and development on the continent.
Monetary policy has an important role to play in the development of our economies and the continent in general.
It is generally accepted that a stable macroeconomic environment is essential for economic growth.
Maintaining price and financial stability are two of the key characteristics in this regard.
I do not need to remind this audience about the role that central banks should play in promoting price and financial stability.
There are a number of other challenges that need to be overcome in pursuing the objective of economic integration on the continent. Economic convergence strengthens economic integration.
The effort of countries and regions across the continent directed at meeting the convergence criteria has been below expectations.
International developments have adversely influenced the socio-macroeconomic outcomes in our countries.
However, there is little doubt that a redoubling of efforts on our part is also required to put our growth and inflation trajectory back on track as well as alleviating budget deficits and other structural constraints in our countries.
We must also learn from other regions in our pursuit of integrating the continent. Europe can provide some useful lessons in this regard and this is something you have catered for in your symposium programme.
We need to also consider the experiences of other regions, like Asia and Latin America, among others.
South Africa remains committed to the development of the region and continent. I am very pleased to note that the South African Reserve Bank will assume the Presidency of the Association in the next year.
I am sure that the Bank will, in collaboration with the other central banks on the continent, drive some concrete initiatives in support of Agenda 2063 during its Presidency.
South Africa will also assume the chair of the SADC this month. We will ensure that the projects to be pursued in SADC are closely aligned with those of the African Union.
Furthermore, South Africa will also chair the BRICS forum next year. The BRICS Africa Regional Centre of the New Development Bank will be opening its doors in Johannesburg next month.
It is envisaged that this office will contribute to accessing the much needed resources to pursue our developmental goals on the continent.
Finally, as the only African country in the G20, South Africa remains committed to ensuring that African interests are well represented in international deliberations and agreements.
The G20 has launched the Africa Partnership initiative which is meant to provide international support for the African Union's Agenda 2063.
We should actively participate in this and other such initiatives which could assist in driving the developmental agenda on the continent.
I encourage you to inform your South African counterparts of any issues of interest to Africa that warrant special attention in the G20 and other international fora that South Africa engages in.
Ladies and Gentlemen,
Esteemed guests, I would like to conclude by wishing you a very engaging Symposium and a successful Ordinary Meeting of African Governors.
I trust your deliberations will result in a fruitful exchange of ideas that will culminate in the development of policies that will assist in making meaningful inroads in furthering the development agenda on the continent.
I trust that you will also have the opportunity to visit some other parts of our beautiful country.
It is now my pleasure to officially declare this Symposium of the Governors of the Association of African Central Banks open.
I thank you.
