If the confidence exuded by a panel debating the power and potential of African local capital markets during the Africa CEO Forum in Abidjan, Côte d’Ivoire, is anything to go by, then Africa has a great future.
The panel observed that Africa is mature and has the capacity to finance its development needs. African financial flows are already significantly African and total external financial flows in fact amount to less than 8.4% of Africa’s estimated annual US $2.5-trillion economy. The external flows which are Eurobonds (0.6%), portfolio investments (0.7%), remittances (2.6%), overseas development assistance (2.2%) and foreign direct investments (2.2%) account for less than 10% of total annual financial flows. Meanwhile domestic credit to the private sector accounts for at least 36%, and endogenous tax revenues at least 22%.
The continent must cash on this confidence to develop local capital markets, tap into the creativity of its human resource, enhance private-public partnerships, fund most of its activities and erase the begging bowl tag that has characterized the continent for decades.