Abstract

The formulation of an appropriate policy framework for effective resource mobilization in Africa must begin with an assessment of the role that the financial sector has played in the region’s economy, and the shortcomings that it may have faced in mobilizing the necessary resources for investment. In the contemporary African context, efficient functioning of the financial sector takes on added significance for at least three reasons. First, if the region is to emerge from the economic crisis of the last decade and a half, the financial sector must contribute to the recovery through the enhancement of the savings-investment process. Second, the widespread economic liberalization programs that have swept across Africa put greater reliance on the private sector, which clearly requires efficient institutions to meet its financing requirements. And third, increasing competitiveness in the global economy requires that the financial system be efficient and flexible enough to support the region’s external economic relations.