Central bank governors from across Africa have said appropriate mechanism should be established to tap into various sources of capital to finance Small and Medium-Scale Enterprises.

They listed the alternative funding sources as Diaspora remittances, pension funds, sovereign wealth funds and excess foreign reserves.

The group also identified inadequate infrastructure as a serious constraint to Africa’s development.

In a communiqué presented after their first caucus meeting at the 7th annual joint meeting of the Africa Union Conference of Finance Ministers on Sunday in Abuja, the central bank governors said there was an urgent need to develop strategies to tackle the issues of inclusive growth and equitable allocation of resources.

The communique read in part, “We observe that the new focus of many central banks, especially after the global financial crisis, shifted towards the use of policies that support the real sector and inclusive growth.

“The role of central banks as economic advisers to the government should be exploited in the context of promoting domestic and continental industrialisation agenda.

“It is important that financing of industrialisation is acknowledged as a primary objective of the fiscal authority, and for central banks to be recognised and given primary supportive role in achieving it.”

Meanwhile, the acting Governor of the Central Bank of Nigeria, Dr. Sarah Alade, has called for a strong political will among policymakers within the African region to industrialise the continent.

Alade stated this on Sunday while featuring as a panelist at the 7th annual meeting of the Economic Commission of Africa’s Conference of African Ministers of Finance, Planning and Economic Development.

The acting governor, who spoke on the theme ‘Capacity and institutions for industrial development: The role of the public and private sectors’, also advocated an expansion in the mandate of central banks, noting that their current function was narrowed to price stability.

She urged policymakers in the region to come up with practicable  solutions that would help to remove the barriers to industrialisation and deepen regional integration.

She said, “Before globalisation, central banks of developed economies were involved  in development issues; we cannot industrialise in Africa with narrow focus on price stability. Commitment and political will is a very important objective in this industrialisation drive. We don’t need to pay lip service to it.”

Alade also called for innovative financing model to boost the developmental projects that would deepen trade and ensure regional integration.

This, she said, would help to create the much needed jobs and reduce poverty within the region.

She noted that countries such as Brazil had established financing institution that helped in its development initiatives.

Source: Punch (by Ifeanyi Onuba)