The Financial Institutions
Article 19 of the AU Constitutive Act provides for three specific financial organs to be created, the African Central Bank (ACB), African Investment Bank (AIB) and African Monetary Fund (AMF). The role of these institutions is to implement the economic integration called for in the
1991 Treaty Establishing the African Economic Community (Abuja Treaty). The 1999 Sirte Declaration, under which the OAU decided to create the AU, called for the speedy establishment of all institutions proposed in the Abuja Treaty.
The AU Assembly has adopted protocols for the establishment of the AIB and AMF (detailed as follows). The draft Protocol for the Establishment of the ACB has not yet been submitted to the Assembly. Proposed structures will be submitted to the Executive Council for approval once the protocols for each institution come into force.
african central bank
The African Central Bank's (ACB's) purpose will be to build a common monetary policy and single African currency as a way to accelerate economic integration as envisaged in articles 6 and 44 of the Abuja Treaty. The ACB’s objectives will be to:
- Promote international monetary cooperation through a permanent institution
- Promote exchange stability and avoid competitive exchange rates depreciation
- Assist in the establishment of a multilateral system of payments in respect of current transactions between members and eliminate foreign exchange restrictions that hamper the growth of world trade.
It is proposed that the ACB Headquarters will be in Abuja, Nigeria.
african investment bank
The African Investment Bank's (AIB's) purpose will be to foster economic growth and accelerate economic integration in Africa, as envisaged by articles 6 and 44 of the Abuja Treaty. The AIB’s objectives will be to:
- Promote public and private sector investment activities intended to advance AU Member
State regional integration
- Utilise available resources for the implementation of investment projects contributing to strengthening of the private sector and modernisation of rural sector activities and infrastructures
- Mobilise resources from capital markets inside and outside Africa for the financing of investment projects in African countries
- Provide technical assistance as may be needed in African countries for the study, preparation, financing and execution of investment projects.
The AIB will be located in Libya (see Assembly/AU/Dec.64(IV)).
The AU Assembly established the AIB at its February 2009 Summit with the adoption of the Protocol and Statute on the African Investment Bank (see Assembly/AU/Dec.251(XIII)). The Protocol and Statute will enter into force 30 days after ratification by 15 Member States. As of 1 September 2014, 20 Member States had signed and two had ratified the Protocol establishing the AIB.
african monetary fund
The African Monetary Fund's (AMF's) purpose will be to facilitate the integration of African economies by eliminating trade restrictions and providing greater monetary integration, as envisaged under articles 6 and 44 of the Abuja Treaty. The Fund is expected to serve as a pool for central bank reserves and AU Member States’ national currencies. The Fund will prioritise regional macro-economic objectives in its lending policies.
The specific AMF objectives include:
- Providing financial assistance to AU Member States
- Acting as a clearing house as well as undertaking macro-economic surveillance within the continent
- Coordinating the monetary policies of Member States and promoting cooperation between their monetary authorities
- Encouraging capital movements between Member States.
The Headquarters of the AMF will be in Yaoundé, Cameroon (see EX.CL/Dec.329 (X)).
The AU Assembly established the AMF at the Malabo Summit in June 2014 with the adoption of the Protocol and Statute for the Establishment of the African Monetary Fund (see Assembly/ AU/Dec.517(XXIII)). The Protocol and Statute will enter into force 30 days after ratification by 15 Member States. As at 1 September 2014, no Member States had signed or ratified the Protocol.