Financial Development in Sub-Saharan Africa: The Challenge for Sustained Growth

Deep and efficient financial sectors are important in supporting growth. Against this general finding of the literature we take stock of changes in financial development in Sub-Saharan Africa since the late 1990s by looking at different measures of the extent of progress. The analysis confirms that gains in macroeconomic stability and a commodity resource boom since the late 1990s have been accompanied by financial deepening and improved financial policies in the region. However, progress has varied across countries, with some achieving diversification of financial products and gaining access to international financial markets while others are lagging behind. Furthermore, in most countries the range of institutions and the level of financial inclusion remain narrow, limiting prospects for sustained and inclusive growth in the region. We conclude with policy implications related to these challenges.