Can Africa afford to finance its economic growth?

Estimated read time 3 min read

The rise of Africa’s financial services sector in recent years has been remarkable. From a
relatively underexplored and underinvested sector a mere decade ago, today, this sector is
considered to be one of the continent’s brightest prospects. This is due to the fact that financial

sector development has been on the agenda of African policymakers for some time now as (aside
from profitable opportunities for investors) continued development of this sector has the potential
to transform the lives of millions of people across the continent. For instance, access to credit by
the SME/the more informal businesses has the ability to provide jobs, create safety networks and,
ultimately play a role in reducing poverty.

With this in mind, various policy reforms over the past decade have contributed to an
environment more conducive to financial sector development and, where Governments have
made progress in introducing much needed regulatory frameworks, information systems and
regulatory institutions – all aimed at enabling and facilitating further development of this sector.

The transformation, however, is not something that will happen overnight, in a week, a month or
a year. And, while most African countries still lag behind the rest of the world in the adoption of
banking and insurance products, this creates substantial scope for continued future development.
Thus offering profitable opportunities for investors who are willing to take on some risk and are
innovative – as their success will depend of their ability to devise new products, or new ways to
deliver their product offering that suits the nature of both the targeted markets and consumers
therein, across the African continent.

Africa is facing several pressing challenges, including political unrest, environmental
degradation, and the pressing need for economic growth. The continent’s youthful population is
making it a desirable consumer market, attracting the interest of global supply chains.

One query still stands in the middle of all of this: Can Africa finance its economic development,
and if so, how?

Under a trade agreement, Africa’s exports could surge to nearly $1 trillion.

African countries stand to benefit greatly from a transformation in the export and trade
environment in the current global economy; estimates indicate that by 2035, exports worth one
trillion dollars are anticipated.

For example, Gambia to launch stock market for local businesses

Gambia is set to achieve a significant milestone by launching its first-ever stock market, just after
debuting its first capital market. This historic event paves the way for a host of new financial
opportunities within the country, creating an attractive environment for investors to participate in
the nation’s economic progress.

Most of the African countries have been involved on the implementation policies that foster a
business-friendly environment. This includes reducing bureaucratic hurdles, ensuring legal
stability, and offering tax incentives. Investing in infrastructure development, education, and
technology can also attract investors by demonstrating a commitment to long-term growth.

Additionally, transparent regulatory frameworks and strong institutions contribute to a stable and
attractive investment climate. Regularly engaging with the business community and seeking
feedback helps in refining policies to meet investor needs.

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