Paper

African Financial Systems: A Review

Exploring financial systems in Africa
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This paper reviews financial systems in four regions of the African continent, namely Arab North Africa, West Africa, East and Central Africa and Southern Africa.

The review explores elements of the financial systems in each of the four regions. They include:

  • Banking systems consisting of central banks and deposit-taking institutions;
  • Insurance industry;
  • Depth, liquidity and performance of stock markets, sectoral investment opportunities and stock exchange trading systems;
  • Bond markets;
  • Derivative markets;
  • Private equity funds, pension funds and other nonbank financial institutions;
  • Organized and informal microfinance systems;
  • Impact of the current financial crisis.

The paper discusses challenges facing the sector, and risks that potential investors should be aware of. These include lack of depth and liquidity, dearth of markets for government and corporate bonds, lack of access to credit for small businesses, macroeconomic and political instability and African currency fluctuations.

About this Publication

By Allen, F., Otchere, I. & Senbet, L.
Published