African leaders approve creation of $20b financial stability fund

African leaders have approved the establishment of a $20 billion continental financial stability fund, the African Development Bank (AfDB) said, a move designed to stave off potential debt crises on the continent before they take hold.

The facility, known as The African Financial Stability Mechanism (AFSM), will get its own credit rating to allow it to borrow on international capital markets, the AfDB, which will host the mechanism, said in a statement seen by Reuters on Tuesday.

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African leaders had called for the creation of the fund in February 2022 and mandated the AfDB to carry out preparations to set it up.