Finance is becoming a powerful lever for sustainable development in Africa.

The Minister of Economy and Finance, Nadia Fettah, stressed, on Monday in Casablanca, that the fluidity of the circulation of capital, the solidity of the financial system, and the release of energies via the mobilization of innovative financing define a coherent vision of a financial future of Africa, where finance becomes a powerful lever at the service of sustainable development.

"We have to think like composite materials, combining flexibility and solidity. Flexibility, to allow the economic, financial, and human flows that energize our economies to circulate. Solidity, to build robust and resilient foundations in the face of economic and geopolitical challenges," said Ms. Fettah at the opening of the Africa Financial Summit (AFIS 2024).

In this sense, she noted that in the global economic landscape, the fluidity of capital is the foundation on which innovation, growth, and prosperity are based. "In Africa, where the financing needs for infrastructure, ecological transition, and social inclusion exceed $1,200 billion by 2030, the efficient movement of capital is becoming a strategic necessity. However, the continent is facing structural, regulatory, and technological obstacles that are holding back this essential dynamic".

Faced with multiple challenges, several solutions are emerging to improve the fluidity of capital, the minister noted, noting that the PAPSS (Pan-African Payment and Settlement System), a promising initiative supported by the African Import-Export Bank (Afreximbank) and designed to facilitate cross-border payments, now allows cross-border payments in local currencies, promising an annual saving of $5 billion.

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And to continue: "At the same time, African fintechs, like Flutterwave, M-Pesa, and Chipper Cash, are redefining access to financial services by connecting millions of people, including in rural areas. This rapidly expanding market is expected to grow by 20% per year and reach $40 billion by 2025".

Similarly, initiatives such as the African Continental Free Trade Area (AfCFTA) are essential for simplifying regulatory frameworks and reducing trade barriers. "But the fluidity of capital alone cannot guarantee a sustainable financial system. This circulation must be based on solid foundations," advocated Ms. Fettah. According to her, the solidity of a financial system is based on rigorous regulation, exemplary governance, and controlled macroeconomic balances. Africa must strengthen the resilience of its financial institutions to attract investors while ensuring long-term stability.

The minister also stressed the importance of robust regulation and effective supervision to ensure stability, recalling that in 2023, the public debt service in Africa reached $163 billion, thus limiting the capacities of governments to invest in strategic sectors such as education and infrastructure.

About climate resilience, Ms. Fettah considered that Africa must equip itself with climate risk management mechanisms, considering it necessary to release the latent energies of the continent, which has immense potential, both at the level of human, financial, and institutional resources.

"Financing major infrastructure and ecological transition projects remains a major challenge. Every year, Africa must fill a financing gap of $108 billion for infrastructure and $250 billion to meet its climate needs," she lamented.

And to maintain that innovative financing models, such as concessional loans from the Central Bank of West African States (BCEAO) or public-private partnerships (PPP), represent potential solutions to meet these needs.

For the Minister, social inclusion, in particular through microfinance and instruments such as "gender bonds," also makes it possible to strengthen access to financing for specific groups, such as women entrepreneurs.

The key to success lies in active collaboration between governments, financial institutions, and the private sector, which must work together to maximize the impact of available resources, not only by mobilizing funds but also by building an ecosystem conducive to innovation and sustainable growth, concluded Ms. Fettah.

Founded by Jeune Afrique Media Group in 2021 and co-organized by IFC (International Finance Corporation), AFIS exposes, through more than 30 panels and high-level round tables, the structural reforms necessary to strengthen the resilience of the sector and remove obstacles to financing the continent's economies at a time of regional and international upheavals.

Initiated under the theme "The time of the African financial powers has come", this forum, which knows the participation of no less than 1,000 leaders of the African financial sector, political decision-makers, and regulators, is based on five key priorities to promote the necessary transformations, namely "creating banking products and capital market solutions to direct local resources towards productive investments", "reduce the cost and time of cross-border transactions and allow the development of trade between African countries", "strengthen capital requirements for financial institutions", "consolidate industry" and "encourage partnerships with international financial centers".