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“Under the leadership of His Majesty the King, Morocco does not claim to be the center of Africa, but aspires to be at the heart of each of its citizens”, stated Nadia Fettah in his opening address to the Africa Financial Industry Summit (AFIS), emphasizing the Kingdom’s ambition to build a “prosperous, just and sustainable” continent. The minister underlined the importance of this summit, marked by the presence of more than 1,000 participants from the four corners of the continent and the world, “reflecting the spirit of transformation that drives AFIS”.
In a context where financing needs in Africa will exceed 1.200 billion dollars by 2030, Nadia Fettah insisted on the need to improve the circulation of capital. “Fluidity is essential to direct capital towards strategic uses, support SMEs and boost the ecological transition,” she said.
It has faced major challenges, such as economic fragmentation among the 54 African countries, where approximately 80% of intra-African transactions still go through foreign currencies, thus increasing costs and delays.
“Added to this is the prohibitive cost of money transfers: send 200 dollars in sub-Saharan Africa costs on average 8%, according to the World Bank, against 6% on a global scale. This burden slows down economic exchanges and reduces the impact of remittances from the diaspora, which still represent 95 billion dollars in 2022,” she observed.
In response, the minister welcomed initiatives such as the Pan-African PAPSS payment system, which could save 5 billion dollars annually, as well as the role of African fintechs like M-Pesa et Flutterwave in redefining access to financial services by connecting millions of people, including in rural areas.
However, the minister warned that these advances require solid digital infrastructures and harmonized regulations. With almost 50% of Africa’s population without access to the Internet, she called for a concerted effort to overcome these obstacles and attract more international investment.
Strength of financial institutions: building lasting resilience
Ms. Fettah insisted in her speech on the importance of solidity to guarantee a robust financial system, capable of absorbing economic and geopolitical shocks. “Rigorous regulation, strong governance and macroeconomic resilience are essential to inspire investor confidence,” she stressed.
The government official cited challenges such as the uneven implementation of international standards like Basel III and the growing burden of African public debt, estimated at $163 billion in 2023. She called in this sense for increased mobilization of domestic resources, by increasing the tax revenue/GDP ratio, currently at 16%well below the global average of 25%.
The minister also spoke of the rise of fintechs and neobanks, highlighting their potential to modernize financial systems, provided they have flexible and appropriate regulatory frameworks.
Liberation of energies: maximizing African potential
To meet the growing needs of the continent, the minister pleaded for the release of human and financial energies. She cited the annual funding gap of $108 billion for infrastructure and 250 billion dollars for the climate, while calling for better use of innovative financial instruments, such as green bonds.
She also highlighted the role of public-private partnerships and blended finance mechanisms to attract capital to strategic projects. “The private sector must play a central role in mobilizing resources,” she said, adding that tax incentive reforms and initiatives like Africa50 are essential to fill the financing gap.
Furthermore, Ms. Fettah highlighted the importance of human capital, with 60% of the African population aged under 25. “Investing in African talent is a priority to maximize economic and social impact,” she stressed.
A call for collective action
For the minister, the success of these objectives depends on a collective and coordinated effort. She reaffirmed Morocco’s commitment to supporting this transformation, concluding: “The Kingdom, under the enlightened leadership of His Majesty The King, stands ready to contribute to this ambitious trajectory for a continent resolutely turned towards the future.”
Organized under the theme “The time of African financial powers has come“, this edition of the Africa Financial Industry Summit, which is being held for the first time on Moroccan soil, brings together private sector leaders and government representatives to discuss strategies that enable African finance to become an engine of development and growth. economic and resilience.
Thus, AFIS 2024 focuses on five key priorities to promote the necessary transformations, namely creating banking products and capital market solutions to direct local resources towards productive investments, reducing the cost and time of cross-border transactions and enable the development of trade between African countries, strengthen capital requirements for financial institutions, consolidate the industry and encourage partnerships with international financial centers.
It is also about offering financial products to the informal workforce, which represents 83% of the African economy, by exploiting the digitalization of insurance and banking services and building a pan-African stock market to tackle market fragmentation and stimulate intra-African investments, thus creating a truly integrated financial ecosystem.
Founded by Jeune Afrique Media Group in 2021 and co-organized by the International Finance Corporation (IFC), AFIS outlines, through more than 30 high-level panels and roundtables, the structural reforms necessary to strengthen the resilience of the sector and remove obstacles to financing the continent’s economies at a time of regional and international upheaval.
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