Cedric Mbeng Mezui Book Launch - " Financing Africa: Strengthening Local Financial Systems "

22.09.2017, Abidjan, Côte d'Ivoire

MFW4A and the Financial Sector Development Department (PIFD) of the African Development Bank (AfDB), organized on 22nd September 2017, the launch and book signing session of “Financer l’Afrique: Densifier les systems financiers locaux” (Financing Africa: Strengthening local financial systems) by Cédric Achille Mezui Mbeng .

The author states that money available in African pension funds, insurance companies and banks far exceeds the amounts needed to finance the continent's economic agenda. He further adds that, strengthening African financial systems can enable African governments reduce their heavy reliance on foreign currency dominated debt thereby improve borrowing terms and conditions. This would offer an efficient and sustainable solution to long-term finance.

Financer l'Afrique is divided in three chapters:

  • Eurobond or "Eurobomb" (Chapter 1);
  • Domestic Capitals (Chapter 2);
  • Funding the Real Economy and Mandates of African Central Banks (Chapter 3)

The first chapter gives an overview of large central banks such as, USA, Euro, UK, and Japan and their accommodative monetary policies (Quantitative Easing, QE). It analyses the impact of banks' choices on external vulnerability of African economies, as well as costs generated by the issuance of Eurobonds in these countries between 2007 and 2015. The book reviews the risks associated with such kind of financing methods. Lastly, a series of advice is given to avoid eurobonds turning into "eurobombs" which could result to a new crisis similar to the one witnessed in the 80's.

Chapter 2, discusses the strengthening of the domestic investor base. It points out the importance of assessing the existing financial means on the continent as well as the emergence of new funding should appropriate reforms be undertaken.

Chapter 3 analyses the impact of budgetary schemes in the use and development of domestic bond markets to finance the real economy. Currently, infrastructure financing is stressed, compared with what is being done in Asian and Latin American countries. This chapter underscores the overarching need to revise the mandates of the African central banks.

In a nutshell, Financer l'Afrique sheds light on the macrofinancial links between all economic stakeholders. It constitutes a decision-making tool that can help tackle financial issues on the continent.