In addition, the continent’s investors get higher returns. In turn, as transaction costs of doing business fall and financial institutions work more effectively, companies, micro-,small and medium-sized enterprises and start-ups will benefit.

Financial integration has been promoting knowledge and technology transfer and greater innovation. The continent’s heavyweight economies to the small-sized players can make inroads from making financial cross-border flows smoother and reach further. Forward-looking island nations and landlocked countries have already blazed a trail on financial services.

The Abuja Treaty sets out the continent’s integration pathway and puts monetary union as a key priority. Yet many of the Regional Economic Communities have not made their currencies convertible and coordinating macroeconomic convergence needs a greater push. As the global financial crisis has shown, being more capital-connected comes with a risk. More data, information and transparency build confidence among national authorities and financial institutions, as does improving regulatory frameworks, safeguards and supervision.

Lighting up Africa’s financial future

A series of actions can make a difference, including promoting banking across borders, increasingly outside of the regional financial centres; standardizing regional payments; putting in place multilateral fiscal guidelines; and joining up policy on inflation, public finance and exchange rate stability. In turn, the continent will see more predictable conditions for cross-border trade and investment to thrive and it will help to light up Africa’s financial future.

Key Indicators
  • Regional convertibility of national currencies
  • Inflation rate differential (based on the Harmonized Consumer Price Index)

Headline Findings

  • ECOWAS is the highest performing REC on Financial and macroeconomic integration.
  • Financial and macroeconomic integration has the lowest score overall among RECs with a 0.381 average.
  • There are a total of 37 high performing countries across the eight RECs on Financial and macroeconomic integration.
  • High performing countries on Financial and macroeconomic integration that are not high performers on regional integration overall:
    CEN-SAD (Chad, Central African Republic, Guinea-Bissau), COMESA (Comoros, Djibouti, Rwanda, Libya), EAC (Rwanda), ECCAS (Chad, Central African Republic, Congo), ECOWAS (Niger, Burkina Faso, Guinea-Bissau, Mali, Benin), IGAD (Djibouti)

Indicators

Regional convertibility of national currencies
Inflation rate differential (based on the Harmonized Consumer Price Index)

UMA

***Financial and macro legend

Regional convertibility of national currencies
Inflation rate differential (based on the Harmonized Consumer Price Index)

COMESA

***Financial and macro legend

Regional convertibility of national currencies
Inflation rate differential (based on the Harmonized Consumer Price Index)

ECCAS

***Financial and macro legend

Regional convertibility of national currencies
Inflation rate differential (based on the Harmonized Consumer Price Index)

EAC

***Financial and macro legend

Regional convertibility of national currencies
Inflation rate differential (based on the Harmonized Consumer Price Index)

ECOWAS

***Financial and macro legend

Regional convertibility of national currencies
Inflation rate differential (based on the Harmonized Consumer Price Index)

SADC

***Financial and macro legend

Regional convertibility of national currencies
Inflation rate differential (based on the Harmonized Consumer Price Index)

CEN-SAD

***Financial and macro legend

Regional convertibility of national currencies
Inflation rate differential (based on the Harmonized Consumer Price Index)

IGAD

***Financial and macro legend

Regional convertibility of national currencies
Inflation rate differential (based on the Harmonized Consumer Price Index)