New Horizons in African Finance : Reducing Risk and Mobilizing Financing on a New Scale
Africa is a region with enormous potential for private investors. It is a continent in transition, with rapid urbanization, increasingstability, a young and growing population, expanding internet connectivity, rising incomes, and shifting consumpti...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
Washington, D.C.
2017
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| Online Access: | http://documents.worldbank.org/curated/en/294191489582398630/New-horizons-in-African-finance-reducing-risk-and-mobilizing-financing-on-a-new-scale http://hdl.handle.net/10986/26432 |
| Summary: | Africa is a region with enormous
potential for private investors. It is a continent in
transition, with rapid urbanization, increasingstability, a
young and growing population, expanding internet
connectivity, rising incomes, and shifting consumption
patterns. Taken together, these enduring trends have created
an abundance of commercial opportunities across the
continent and turned the region into a place that investors
cannot afford to ignore. Yet declining commodity prices,
depreciating currencies and slowing global growth have
increased uncertainty on the continent and sharply reduced
liquidity that companies had used to expand activities in
recent years. Economies face a significant challenge to
diversify and export a wider range of goods and
services.Even before recent global economic turmoil emerged,
investor activity in Africa was constrained by structural
obstacles and a lack of financing options that often
inhibited the effective distribution and mitigation of risk
associated with large-scale or long-term projects.
Fortunately, companies looking to seize still significant
opportunities in Africa can benefit from additional sources
of financing, as well as tools that crowd in more private
sector participants and mitigate risk, spreading it among
different investor classes and over longer timeframes. Tools
such as blended finance, co-financing, local debt and equity
instruments, private equity, and public-private partnerships
are being deployed in Africa in new ways that address risks
associated with low-income and fragile states. They provide
innovative paths to securing financing on a scale that can
match the scope of business opportunities and help manage
risk in high-growthAfrican markets. |
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