The African Union has finally and officially adopted the statutes of the African Monetary Fund (AMF) whose headquarter will be based in Yaoundé, Cameroon. The adoption took place at the end of the 23rd summit of African Heads of States and Governments in Malabo, Equatorial Guinea yesterday 28th of June 2014. This officially creates the African Monetary Fund (AMF).
The main objective of the African Monetary Fund is to provide financial assistance to member states of the African Union faced with balance of payments problems. It is also created to advance the monetary integration in Africa in the coming decades like in the case of the Schengen countries and the Euro (€).
It is a move whereby Africa is now for the first time acting collectively and responsibly in order to find a lasting solution to their balance of payments problems and improving the living conditions of their populations. It is also a move to counter the negative policies of the International Monetary Fund (IMF) on African countries.
The AMF will differ from the IMF in its lending policies, as it will give priority to regional macroeconomic objectives.
This institution is one of three financial institutions of the future African Union. It should be noted that African Union (AU) has created three financial institutions in a bid to facilitate trade within the continent. They are:
1. African Investment Bank (AIB)
To aid in fostering economic growth, and accelerate economic integration in Africa, in line with the broad objective of the African Union.
The Headquarters of the African Investment Bank is Tripoli, Libya.
2. African Monetary Fund (AMF)
To facilitate the integration of African economies, through the elimination of trade restrictions and enhance greater monetary integration. The main objective of the African Monetary Fund is to:
a) Provide financial assistance to AU Member States;
b) Act as a clearing house as well as undertake macro-economic purveyance within the continent;
c) Coordinate the monetary policies of Member States and promote cooperation between the monetary authorities in these states; and
d) Encourage capital movements between member states; amongst others.
The Headquarters of the African Monetary Fund is in Yaoundé, Republic of Cameroon.
3. African Central Bank (ACB)
The ACB, just like the other African financial institutions, is aimed at building a common monetary policy and create the African currency as a way for accelerating economic integration in Africa.
The objective of the African Central Bank would be to:
a) Promote international monetary cooperation through a permanent institution;
b) Promote exchange stability and avoid competitive exchange rates depreciation;
c) Assist in the establishment of a multilateral system of payments in respect of current transactions between members and eliminate foreign exchange restrictions which hamper the growth of world trade.
The Headquarters of the African Central Bank is Abuja, Republic of Nigeria.