With Africa’s population expected to overtake China’s by 2025, the continent’s economic potential is undeniable. At a time of slowing global growth, the world is starting to take notice of Africa’s fast-growing population and markets, and the opportunities they hold. Between 2010 and 2016, more than 320 embassies were opened in Africa, while global investment is beginning to pour in. If Africa truly wants to become an economic powerhouse of the future, it needs to get serious about reforming its financial markets. A broad, all-inclusive financial market that makes it easy for investors will enable Africa to grow. Fortunately, we can see large strides towards progress. The recent ratification of the African Continental Free Trade agreement promises to create a single market with a combined GDP of US$2.5trn and access to 1.2bn people. everal countries have recently progressed in migrating to market-determined foreign exchange regimes, implementing local content policies, and creating more transparent and well-regulated capital markets, which have been supported by an improving tax environment. This is vital for drawing foreign investment, encouraging domestic participation in capital markets, and aiding the development of the local capital markets. Equally impressive is the increased financial inclusion through better design, implementation, and regulation of savings institutions. This has widened opportunities for people in these countries to access capital markets. Progress has also been made through policies that have increased the size of assets held by local investors, creating opportunities to develop financial products and enhance market liquidity.
SOURCES: AFRICAN BUSINESS MAGAZINE