African Financial Systems: A Review

Africa is a continent made up of 53 countries. The continent is economically and culturally diverse, with different regional economic blocs. The financial systems in these countries are as diverse as the countries. Reviewing the financial systems of such a heterogeneous group of countries presents a challenge. Therefore, to make the review more concise, we categorize the countries along geographic lines into four groups, namely, Arab North Africa, West Africa, East and Central Africa, and Southern Africa.1 This review covers, among other things, a brief review of the economies, central banks, deposit-taking banks, non-bank institutions, such as the stock markets, fixed income markets, and microfinance institutions in Africa. In this section, we present an executive summary of the African financial systems, highlighting some of the investment opportunities that exist, and then proceed with an in-depth review of the current state of the financial systems of the various sub-groups in Africa. In section II, we review the financial systems in North Africa. The financial systems in West Africa are reviewed in Section III, while those in Central and East Africa are reviewed in Section IV. In Section V, we examine the financial systems in Southern Africa. We conclude with a brief discussion of the risks that potential investors should be concerned about in Section VI.