Financing Africa takes stock of Africa's financial systems in light of recent changes in the global financial system --including the greater risk aversion of international investors, a shift in economic and financial powers towards emerging markets and the regulatory reform debate - and the increasing role of technology. Using a wider and more detailed array of data than previous publications, we observe a trend towards financial deepening, more stability and more inclusion leading up to the crisis; serious challenges, however, continue, including limited access to financial services, focus on short-term contracts and hidden fragility, related to weak regulatory frameworks, undue government interference and governance deficiencies. Our policy analysis therefore focuses on (i) expanding outreach, (ii) fostering long-term finance and (iii) improving regulation and supervision. We identify the positive role of innovation and competition, a stronger focus on non-traditional financial service providers, and more emphasis on demand-side constraints as priority areas for policy actions. Specifically, competition from new players outside the banking system, including telecomm companies can increase outreach with technological innovation that changes the economics of retail finance. Moving beyond national stock exchanges that are not sustainable in most African countries towards regional solutions and over-the-counter trades can help foster long-term finance, as can addressing governance challenges in contractual savings institutions, including life insurance companies and pension funds. Finally, there is a need to look beyond supply-side constraints towards users of financial services, focusing more on financial literacy of households and firms, but also consumer protection. In formulating policy messages, we carefully distinguish between different country groupings, differentiating -- among others -- between low- and middle-income and small and larger economies, with a special focus on resource-based economies and post-conflict countries. This book reaches out to both policy makers concerned about a more inclusive and effective financial system and other stakeholders, including practitioners and development partners. With this book we aim to contribute to the on-going financial sector debate on Africa, with the ultimate goal of faster economic development and poverty reduction.

This volume addresses the issues of financing urban growth of the African continent -- which has the highest urban growth rate on the planet -- in the next decades. Considerable investment will be needed to sustain this level of growth and to clear up accumulated backlogs. At the same time, decentralization has resulted in increased responsibilities for local government; but in most cases, institutional reforms were carried out without the transfer of a sufficient level of resources, and local capacities in governance and project management are weak. Which mechanisms will finance these extensive needs, and how will African local governments meet these needs? Specifics on how to finance African cities have not been studied. The actual scale of this market has not been fully grasped. A systemic approach to this market is difficult because of its diversity (country size; institutional context; characteristics of urban network; availability of capital market, currency, etc.) and a lack of data. Donors’ assistance methods in the sector are disparate, marked by disputes between different schools of thought; special-purpose vehicles created by donors operate according to a variety of methods and with wide-ranging and sparsely disseminated results. What is the best way to transform these systems, often antiquated in many respects, into modern financing systems that facilitate access to domestic markets, mobilize local savings and reinforce local government autonomy? There is no single answer to this question in regard to such a variety of institutional and economic contexts. The main objective of the study is to clarify the debates and to enlighten the choices of African decision-makers at local and national level.

This book examines the impact of financing on Africa’s economic development. By exploring various financial instruments including the role of alternative sources of funding like migrant remittances and illicit flows, it analyses the role of financing for Africa’s macroeconomic development and other development indicators such as infrastructure, transport, global trade, industrialisation, social services, external indebtedness and governance. By presenting and examining case studies on various African countries and regions, the respective contributions investigate the capacity of institutions to facilitate and structure the economy’s funding activities, and to strengthen the ties between finance and development. Furthermore, they discuss various regional aspects, such as the integration of infrastructure, harmonization of fiscal policy, integration of financial markets, and the facilitation of intra-regional trade and movement of capital. Given its scope, the book will appeal to scholars of economics and development studies with an interest in the economic development of Africa.

This book analyzes Africa's unprecedented economic growth, the state of its financial sector, and the varied opportunities for Islamic finance investors. It considers the role - potential and realized - of Islamic finance in fostering financial inclusion in areas such as banking, microfinance, capital market development, insurance, and private equity business. The book stresses that investing in Africa through Islamic finance will open new markets, ensure higher profit margins, diversify risk, and create business competition; and that these changes that will provide financial products that can satisfying the desires and beliefs of all consumers and unlock the real potential of the continent's financial system. The book also looks into the rise of international interest in Africa and concludes by scrutinizing the challenges impeding further economic growth, as well as the specific barriers that need to be addressed in order to promote the implementation of Islamic finance. Investors, policymakers, and academics ready to confront these challenges will find much of value in this book.

For millions of Africans, growth is yet to translate into jobs and better living conditions. Africa's largely commodity- driven growth has not been matched by the much needed structural change that can lead to economic transformation, employment, and reduced poverty. Market failures necessitate industrial policy interventions. Yet, in the absence of the right processes and institutions, good industrial policies will fail. Indeed, weak institutions and poor policy design have hindered industrial policy. This report gives a framework for getting the policy process right to foster industrialization. It uses 11 country case studies to assess the critical ingredients for spurring industrialization - innovative institutions, effective processes and flexible mechanisms - and structural transformation.

As aid alone cannot finance development the emergence of new financing options is good news, but it also raises challenges. This book assess the changing landscape of international development finance from a global and a developing-country perspective. It looks at thepolicy implications for donor and recipient alike and provides recommendations on policy mechanisms for the use of both grants and loans in development finance, and on the challenges of managing diverse financial flows at country-level.