To strengthen and support Africa’s position in an evolving global financial architecture, the African Union (AU) is expected to launch an Alliance of African Multilateral Financial Institutions (AAMFI) dubbed ‘Africa Club’.

ALSO READ: Africa demands ‘fair international finance architecture’

The launch is expected to take place on February 17, during the Presidential Dialogue on African Union financial institutions, and reforms of the global financial architecture, as part of the 37th Ordinary Session of the AU Assembly.

The global financial architecture, which encompasses international financial institutions, global economic governance structures, and financial regulatory mechanisms, plays a pivotal role in shaping Africa's economic destiny.

However, on several occasions, African leaders have called on reforms of these financial institutions that act on unfavourable quota system which favours rich nations, which are then used to justify successive smaller allocations and voices to Africa whose needs far outstrip those of richer nations.

ALSO READ: Kagame: Now is the time to make international financial system fit for purpose

Faced with the inadequacies of the global and continental financial landscape, African nations created a treaty African Multilateral Financial Institutions (AMFIs), which are African-owned and African controlled.

These include the African Export Import Bank (AfreximBank), Trade and Development Bank (TDB), Africa Finance Corporation (AFC), African Reinsurance Corporation (Africa Re) and African Trade and Investment Development Insurance (ATIDI).

With the growing impact on financing and investment in the continent since their establishment, they collectively hold assets worth more than $53 billion, attracting equity investment of over $8.6 billion, primarily from African countries, to support African growth and resilience.

These institutions are among the leading supporters of African integration through trade, investment, and infrastructure financing to help implement the African Continental Free Trade Area (AfCFTA) and AU Agenda 2063.

Establishing the alliance, Africa Club, aims to bring member institutions together to find solutions to financing challenges and help support Africa’s sustainable economic development and integration objectives, in line with their respective mandates and the development objectives of their member states.

Membership of the Africa Club, as announced, will be open to all African multilateral financial institutions that are aligned with the objectives, purposes, and criteria of the Club.

The AU and African leaders have long underscored the need to establish an African Monetary Union by harmonizing monetary zones and creating three African Union financial institutions, the African Central Bank (ACB), the African Monetary Fund (AMF) and the African Investment Bank (AIB), as well as the feasibility of creating a Pan-African Stock Exchange (PASE).

However, none of the financial institutions has reached the requisite number of ratifications to enter into force.