The African Union has created three financial institutions in a bid to facilitate trade within the continent. They are : the African Investment Bank (AIB), the African Monetary Fund (AMF) and the African Central Bank (ACB).
1. African Investment Bank (AIB)
The African Investment Bank is one of the three financial institutions planned for in the Constitutive Act of the African Union. The mandate of the African Investment Bank was envisioned to aid in fostering economic growth and accelerating economic integration in Africa in line with the broad objective of the African Union.
To achieve these objectives, the Bank will carry out the following tasks:
i) Promote investment activities of the public and private sector intended to advance regional integration of the member States of the African Union;
ii) Utilize available resources for the implementation of investment projects contributing to the strengthening of the private sector and the modernization of rural sector activities and infrastructures;
iii) Mobilize resources from capital markets inside and outside Africa for the financing of investment projects in African countries; and
iv) Provide technical assistance as may be needed in African countries for the study, preparation, financing and execution of investment projects.
The Headquarters of the African Investment Bank is Tripoli, Great Socialist People's Libyan Arab Jamahiriya.
A formal agreement with the host country to establish a Steering Committee in order to commence technical studies on the institutional and organization aspects of the Bank was signed . The mission of the technical steering committee is to spearhead studies leading to the setting up of the bank, including working out the fine-print details of its sources of funding, management and institutional framework.
2. African Monetary Fund (AMF)
The African Monetary Fund (AMF) is stipulated in the Abuja Treaty in the Constitutive Act of the African Union, Article 19, , in a bid 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.
A Memorandum of Understanding to set up a Technical Steering Committee to undertake the implementation for the hosting of the African Monetary Fund was signed on 30 June 2008, between the African Union Commission and the Cameroon Government, at the margins of the 11th Ordinary Session of the African Union Summit of Heads of States and Government that took place in Sharm El Sheikh, Arab Republic of Egypt.
3. African Central Bank (ACB)
The African Central Bank was created following the 1991 Abuja Treaty and reiterated by the 1999 Sirte Declaration that called for the speeding up of the implementation process.
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.