Africa’s $1tn financial potential constrained by fragmented markets – BoG

The Second Deputy Governor of the Bank of Ghana, Matilda Asante-Asiedu, has called for urgent reforms to better structure Africa’s financial markets, warning that weak coordination is limiting the continent’s ability to mobilise domestic capital for development.

She noted that Africa holds over one trillion dollars in financial resources across pensions, capital markets, savings, investments and remittances, but said these funds are not being effectively directed into long-term productive investments.

According to her, in the face of increasing global economic uncertainties, African countries must deliberately look inward and find ways to pool and structure these resources to strengthen resilience and drive growth.

Despite the existence of more than 30 stock and bond markets across the continent, she said the lack of integration prevents countries from accessing capital beyond their borders, underscoring the need for stronger coordination, political commitment and leadership from key economic actors.

“For Africa to build resilience, Africa has to begin to look inward, because we all know what is happening geopolitically in the economies of the world,” she said, adding that “Africa has in excess of 1 trillion in revenue when it comes to whether it’s pension funds, capital and bond markets, investment and savings remittance; that’s significant resource.”

She explained that much of this capital is not being channelled into long-term investments, stressing the need for deliberate policies to redirect funds into productive sectors.

“If you take the stock markets for instance, there are over 30 stock markets and bond markets in Africa, but they are not structured,” she noted, adding that “from Ghana, I cannot go and borrow from the stock markets in Kenya, but if that was properly structured, I could actually be borrowing from Kenya.”

She further indicated that greater integration would allow capital to flow more efficiently across borders, benefiting both investors and economies.

According to her, “Kenyan investments will get returns and the Ghanaian economy will also grow through the investment that I make.”

She concluded that building such a system would require strong political will and active leadership from economic stakeholders to promote financial integration and resilience across the continent.