Dr. Ngozi Okonjo-Iweala, Director-General of the World Trade Organization (WTO), has called on African leaders to prioritize internal funding mechanisms to drive the continent’s socio-economic transformation.
Speaking at the Heads of State and Government breakfast dialogue held at the African Union (AU) Commission Headquarters in Addis Ababa, Ethiopia, Dr. Okonjo-Iweala emphasized the importance of leveraging Africa’s resources to finance its own development agenda.
The event, hosted by former Ghanaian President John Dramani Mahama, was themed “Africa at the Forefront: Mobilizing African Investment and Financing for Implementing Agenda 2063.” It was organized under the auspices of the Alliance of African Multilateral Financing Institutions, also known as the African Club, and took place on the sidelines of the AU Summit.
Dr. Okonjo-Iweala urged African leaders to move away from excessive external borrowing and instead explore innovative financial solutions that would enable the continent to sustain its growth trajectory. “We must take advantage of investment that comes to Africa and be able to sustain them for our own development,” she stated.
Harnessing Internal Resources for Development
In her address, Dr. Okonjo-Iweala outlined key strategies through which Africa could raise capital for its development without relying heavily on external debt. Among these strategies is the enhancement of value addition to the continent’s abundant natural resources. She noted that Africa often exports raw materials with little or no processing, thus missing out on potential revenues that could be reinvested in development initiatives. By fostering industries that refine and manufacture goods from raw materials, the continent could significantly increase its financial reserves.
Additionally, Dr. Okonjo-Iweala encouraged African nations to tap into their pension funds as a means of raising patient capital to support long-term development projects. Pension funds, which are typically long-term investment vehicles, could provide stable financial backing for infrastructure, energy, and social development projects critical to the achievement of Agenda 2063.
Another innovative financing mechanism she proposed was the pricing of carbon emissions. With climate change being a global concern, Africa could benefit from carbon markets by implementing measures to price and trade carbon emissions. This would not only contribute to global sustainability efforts but also generate much-needed revenue to fund development projects
Reducing Dependency on External Borrowing
A central theme in Dr. Okonjo-Iweala’s remarks was the need to curtail Africa’s dependence on borrowing. Many African countries have accumulated high levels of debt, which often comes with unfavorable terms and high-interest rates, placing significant strain on national economies. The WTO chief advised that, instead of taking on more loans, African nations should focus on creating an environment that attracts and retains investments.
Her call for self-reliance aligns with broader discussions held during the high-level panel session on “Mobilizing African Investment and Financing for Implementing Agenda 2063.” The session featured prominent African policymakers and financial experts who deliberated on sustainable approaches to mobilizing African finance for the realization of the continent’s long-term development vision.
To sustain investments, Dr. Okonjo-Iweala stressed the importance of policy consistency, regulatory reforms, and political stability. She pointed out that investors are more likely to commit long-term resources to countries with transparent governance structures, predictable economic policies, and a stable political climate.
Moreover, African governments were encouraged to foster regional cooperation to attract large-scale investments. By strengthening intra-African trade and economic integration, the continent can present a united front to investors and create lucrative opportunities for economic partnerships.
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