Unlocking financial services potential in Africa through cross-border banking

A well-functioning financial system is critical to Africa’s long-term growth. The financial sector can promote economic growth, stimulate investment and contribute to poverty reduction (Demirguc-Kunt, 2006; Fry, 1995). This chapter discusses the importance of financial inclusion in the context of financial sector development, the regulatory dimensions of financial services trade in the context of growing banking internationalization in Africa, and the importance of striking a balance between domestic development priorities and policy space in relation to liberalization commitments, rising competition and foreign entry. The chapter concludes with policy recommendations on how countries can approach the regulatory dilemma they often face, between greater financial inclusion on the one hand and liberalization on the other.

Related Subject(s): Economic and Social Development