President John Mahama has urged African leaders to strengthen multilateral financial institutions to drive sustainable development.

Mr Mahama, who made the call on the sidelines of the 38th AU Summit on Sunday in Addis Ababa, urged the leaders to accelerate the establishment of key AU financial institutions, such as the African Central Bank, African Investment Bank, African Monetary Fund, and Pan-African Stock Exchange.

He also emphasised the need for African leaders to prioritise investment and financing of the African dream to realise Agenda 2063.

According to him, Africa’s economic journey has demonstrated resilience amidst numerous challenges, saying in 2023, the continent experienced a slowdown with real GDP growth decline to 3.1 per cent from 4.1 per cent in 2022.

Mr Mahama said, “The projections suggest a recovery with growth expected to increase to 3.7 per cent in 2024 and 4.3 per cent in 2025. This optimistic outlook highlights the inherent strength of our economies and the effectiveness of our policy interventions.

“In spite of these positive trends, we must confront the reality that our growth has not always translated into significant improvements in per capita income. Structural transformation remains uneven, with many economies still reliant on low-productivity sectors.”

The Ghanaian president also mentioned that the continent continues to face challenges such as climate issues, geopolitical tensions, widening gaps in multilateralism, diseases, and pandemics that disrupt the path to positive growth.

He stated that to achieve sustainable development, there is a need to envision strategic investments in health, education, energy, technology, and infrastructure.

He expressed regret that the financing gap for such investments is substantial and estimated at approximately 402 billion dollars annually until 2030 to actualise the targets of Agenda 2063 and meet the 2030 Sustainable Development Goals objectives.

He said domestic efforts alone would not suffice as it is projected that African countries need to increase their median tax-to-GDP ratio by about 13.2 percentage points to 27.2 per cent of GDP to close the financing gap by 2030.

Mr Mahama reiterated the need for additional innovative financial resources and reform of the global financial architecture to ensure equitable and inclusive distribution of resources.

(NAN)