February 5/2022/ENA/ The newly elected Chairperson of African Union, Machy Sall calls for a reform of international economic and financial governance and the establishment of pan African rating agency.
Speaking at the 35th AU summit today Sall said Africa is lagging behind in the field of economic development despite its potential for economic emergence.
With over 1.3 billion inhabitants, Africa has more than 30 million square kilometers of land, he said.
According to him, the continent’s potential includes important reserves of water, 60 percent of the world arable land, hydrocarbon and 40 percent of the world’s gold reserve.
He also said that Africa has between 85 to 95 percent of the world’s metal reserves including chrome platinum, more than 50 percent of cobalt and a third in the reserves of oxide.
Despite all this potential, he said: “our economy is severely underfinanced due to the rule and rigid procedures of international financial institutions that impedes the access of crucial finance for development.”
He called on AU member states to concentrate effort to reform international economic and financial governance.
In 2020 while the world was suffering the impact of COVID, 18 out of 32 African countries were evaluated by one of the rating agencies that brought down the rating, he lamented.
According to him, some 20 percent of the rating parameters depend on subjective factors without relation to fundamentals that determined the stability of an economy.
The incoming Chairperson stated that the perception of investment risk in Africa remains higher than the real risk on the ground, which in fact increases the interest rate that penalizes the competitiveness of African economies.
He called on the AU member states to establish a task force of the Union to consider thoroughly the problem of financial economy including the reforms of the rules of OECD and the establishment of pan African rating agency.
Sall also vowed to continue for more advocacies for equitable representation of Africa in UN Security Council.