In the heart of Africa’s economic crucible, a seismic shift is underway. The continent’s leaders, weary of a global public and private financial architecture that has long failed them, are now wielding their collective voice as a potent weapon. As the world grapples with crises – ranging from climate upheaval to geopolitical tensions – Africa stands at a crossroads of opportunity and urgency. The delicate dance of balancing social stability, development imperatives and sustainable debt levels has become untenable.

With unwavering resolve, Presidents Nana Akufo-Addo of Ghana, William Samoei Ruto of Kenya, and Hakainde Hichilema of Zambia have stepped onto the global stage, proposing a radical overhaul of financial norms and a reimagining of Africa’s destiny.

To bridge gaps in the primary sector and keep pace with futuristic industries like renewables, green hydrogen, artificial intelligence, electric vehicles and semiconductors, Africa requires comprehensive – not selective – investment. The continent remains a promising destination for debt, equity and fund investments waiting for its turn. But a bold approach is needed to tap into the global financial landscape at large.

Africa’s offer

The three presidents have joined forces to propose practical solutions to leverage global finance in Africa. In an article in The Economist, they underline the urgency for a collective response and publicly communicate Africa’s commitment to global collaboration, outlining exactly what Africa strives to achieve.

They highlight five areas of engagement with global finance, from the overhaul of global financial architecture to the establishment of a robust institutional, legal and regulatory framework to manage the macro-financial risks of new global financial flows.

This global appeal, developed by elected officials, demonstrates Africa’s preparedness to receive global capital inflows responsibly. While this should not only reassure investors, financiers, philanthropists, non-governmental organisations and rating agencies, it could also mark the beginning of reducing the ‘perception premiums’ that Africa has long paid to attract investment and international assistance.

Rather than debating whether enough has been done or whether the multilateral system is biased against Africa, the focus should be on comprehending its interests and why those have been neglected by the international markets. In addressing the underlying causes, solutions can be created to benefit the financier and the recipient. But a successful solution is one that benefits everyone in Africa, which requires a continental consensus.

With multiple multilateral initiatives in progress to enhance access to private capital, fund climate resilience and provide debt relief, there is no better time. Replenishments to the International Development Association and the review of International Monetary Fund quotas are also currently underway.

However, the global finance pool is not as buoyant as some regard it to be. More stringent and competing liquidity worldwide is impacting all cross-border investments. As a result, investment flows have become increasingly selective and cautious. Even large emerging markets like China and India are seeing a preference for portfolio equity flows over direct investment. Hopefully, the postwar and post-conflict reconstruction processes (Ukraine, Gaza, Somalia, Yemen, South Sudan and elsewhere) will begin – further charging significant global finance and private capital.

Regional initiatives

The days of nations tweaking their regulatory frameworks and market regulations to attract capital flows are fading. Fortunately, many African countries have eased capital account restrictions, thus promoting macroeconomic stability and greater financial accessibility. Yet, several studies show that Africa is the most disconnected region when measured by the continent’s movement of goods, services, people and information.

While there is room for improvement, particularly in fiscal and monetary policies, Africa has made significant policy advancements for over a decade. The Regional Economic Communities, the African Continental Free Trade Area and the Program for Infrastructure Development in Africa are all examples of critical regional initiatives.

However, at the core of this continental vision must be more robust financial integration. The goal is to promote access to finance and capital market development within regional blocs. Organisations like the West African Monetary Institute and the East African Community Monetary Institute are working to harmonise monetary policies and enhance financial co-operation. But strategic, continent-wide initiatives stand to majorly improve Africa’s voice in global finance.

Green growth and climate resilience is especially integral to regional co-operation. While these initiatives aim to tackle environmental challenges and attract green finance investments, more is needed – particularly in line with the African Union’s Agenda 2063 for sustainable development and climate action.

A continental approach  

Progress is being made, but immense potential remains to fully leverage continental mechanisms in the global financial landscape. A continental approach will allow Africa to pool resources, share infrastructure and collaborate on large-scale projects. By integrating markets and production across multiple borders, economies of scale and scope can be harnessed. As a unified bloc, Africa can negotiate better terms in international trade agreements, investment deals and financial arrangements. Collective bargaining will strengthen Africa compared to individual countries negotiating in isolation. A continental view will also provide an opportunity for safety net arrangements against crisis and spread risk across diverse economies – reducing vulnerability to localised shocks.

Further to this, Africa can implement homegrown solutions to help promote the flow of investments and finance in the continent. For instance, a larger, more integrated market for goods, services and investments will stimulate intra-African trade, develop regional transportation networks, energy grids and digital connectivity spanning multiple countries, thereby benefitting economies at scale. Not only will this attract financing from regional and international sources, but it will also promote global growth in the long run.

The challenges – political differences among member states, capacity constraints, infrastructure gaps, regulatory complexities and funding constraints – should not be underestimated. Yet, the efforts and commitments from African governments, regional organisations, development partners and the private sector could propel Africa’s regional integration and collaboration agenda Adopting a continental view will allow Africa to overcome individual limitations and position itself strategically in the global economic landscape. Global finance could be more amenable and open to bring in risk capital into continental initiatives.

Despite economist Gunnar Myrdal’s optimistic prediction in 1968 that Africa would surpass Asia in growth, the continent’s economic prospects remain uncertain without a significant increase in capital inflow, retention and effective utilisation – or as the presidential troika puts it: more help to help itself.

Udaibir Das is a Visiting Professor at the National Council of Applied Economic Research, a Senior Non-Resident Adviser at the Bank of England, a Senior Adviser of the International Forum for Sovereign Wealth Funds and a Distinguished Fellow at the Observer Research Foundation America.