Data Spotlight: Inclusive Africa: The number of Africans with access to banking and other financial services is growing
  • 1 0000000404811396https://isni.org/isni/0000000404811396International Monetary Fund

Two years ago, citizens in the Arab world—fired by their ideals and visions of a better life—ignited a social movement that inspired people around the globe. In Egypt, Jordan, Libya, Morocco, Tunisia, and Yemen—the so-called Arab countries in transition—people embraced change, ushering in a new era. This issue of F&D looks at the difficulties of this transition, focusing on long-standing forces that shape the region’s economy and offering options for moving ahead to achieve strong, inclusive growth. • Masood Ahmed, Director of the IMF’s Middle East and Central Asia Department, maps out an agenda for modernizing and diversifying the region’s economies in “Toward Prosperity for All.” • In “Freedom and Bread Go Together,” Marwan Muasher addresses the intersection of economic progress and political change. • Vali Nasr, in a Point of View column, underscores the vital role small and medium-sized enterprises play in a successful democratic transition. Elsewhere in this issue, we look at how surging oil and gas production in the United States could shake up global energy markets; the effect of uncertainty on economic growth; and Mexico’s competitiveness rebound. F&D's People in Economics series profiles Christina Romer, former chair of the U.S. Council of Economic Advisers and an architect of the U.S. stimulus package; and the latest installment in our Back to Basics series explains how structural policies help to both stabilize and strengthen economies.

Abstract

Two years ago, citizens in the Arab world—fired by their ideals and visions of a better life—ignited a social movement that inspired people around the globe. In Egypt, Jordan, Libya, Morocco, Tunisia, and Yemen—the so-called Arab countries in transition—people embraced change, ushering in a new era. This issue of F&D looks at the difficulties of this transition, focusing on long-standing forces that shape the region’s economy and offering options for moving ahead to achieve strong, inclusive growth. • Masood Ahmed, Director of the IMF’s Middle East and Central Asia Department, maps out an agenda for modernizing and diversifying the region’s economies in “Toward Prosperity for All.” • In “Freedom and Bread Go Together,” Marwan Muasher addresses the intersection of economic progress and political change. • Vali Nasr, in a Point of View column, underscores the vital role small and medium-sized enterprises play in a successful democratic transition. Elsewhere in this issue, we look at how surging oil and gas production in the United States could shake up global energy markets; the effect of uncertainty on economic growth; and Mexico’s competitiveness rebound. F&D's People in Economics series profiles Christina Romer, former chair of the U.S. Council of Economic Advisers and an architect of the U.S. stimulus package; and the latest installment in our Back to Basics series explains how structural policies help to both stabilize and strengthen economies.

Africa has been among the world’s fastest growing regions during the past decade—the result of a prolonged commodities boom, favorable demographics, good economic policies, and generally improved political stability. Along with that economic growth came an increase in financial services to a growing number of Africans. Although major challenges to financial access remain, the relationship between the growth in per capita GDP and in access to depository services of commercial banks is striking.

Admittedly this process of financial inclusion started from a low base—and there is a huge difference in development across countries. But among all the world’s regions, from 2004 to 2011 Africa had the largest increase in access to depository services (as measured by the number of deposit accounts per 1,000 adults). Africa has caught up to the Middle East and central Asia in access to depository services, and the gap between Africa and the rest of the world is slowly narrowing.

uA17fig02

As African GDP grew from 2004 to 2011, so did commercial deposits per capita.

Citation: Finance & Development 50, 001; 10.5089/9781475542684.022.A017

Note: Size of bubble indicates per capita growth of GDP; 2004 = 100.
uA17fig03

In terms of adults using commercial bank accounts, Africa is closing the gap with the rest of the world.

Citation: Finance & Development 50, 001; 10.5089/9781475542684.022.A017

The number of branches of other types of financial intermediaries (which gather funds from savers and lend them to borrowers) also grew in the region during 2004–11. Those intermediaries include credit unions, financial cooperatives, microfinance institutions, rural banks, savings banks, money market mutual funds, investment companies, finance companies, and leasing companies.

Overall, although there are differences not only across countries but also within countries between cities and rural areas, the number of branches of both bank and nonbank financial institutions grew between 2004 and 2011. Commercial bank branches grew 70 percent over the period, and nonbank financial institutions’ branches expanded by close to 50 percent. There was a decline in nonbank branches during the 2007–09 global financial crisis, but growth rebounded in 2010.

uA17fig04

Branches of both bank and nonbank financial institutions have been growing strongly in Africa.

Citation: Finance & Development 50, 001; 10.5089/9781475542684.022.A017

Note: Countries in the sample account for roughly 80 percent of Africa’s gross domestic product.

About the database

The IMF’s Financial Access Survey database (fas.imf.org) contains annual data and metadata for 187 jurisdictions, from 2004 to 2011. It is available to the public free of charge through the IMF eLibrary (www.elibrary.imf.org). The 2012 survey was conducted in collaboration with the International Finance Corporation and the Consultative Group to Assist the Poor. It has more than 40,000 time series that include basic consumer financial access indicators covering credit unions, financial cooperatives, and microfinance institutions. It separately identifies small and medium enterprises, households, and life insurance and non–life insurance companies. The Netherlands Ministry of Foreign Affairs and the Australian Agency for International Development provided financial support.

Prepared by Luca Errico, Goran Amidzic, and Alexander Massara of the IMF’s Statistics Department.

Finance & Development, March 2013
Author: International Monetary Fund
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    As African GDP grew from 2004 to 2011, so did commercial deposits per capita.

  • View in gallery

    In terms of adults using commercial bank accounts, Africa is closing the gap with the rest of the world.

  • View in gallery

    Branches of both bank and nonbank financial institutions have been growing strongly in Africa.