Innovative Finance and Economic Development in Africa; what are the constraints, policy options and opportunities?

Abstract

Innovative finance performs a vital function in the advancement of socioeconomic activities and this is renowned in development literature. This research investigates the influence innovative finance has on Africa’s development with the focal point on potential sources of innovative finance, constraints of innovative finance, potentials for innovative financing and policy options. The Africa economy has been affected negatively due to the 2008 global economic and financial crisis, climate change and the current COVID 19 pandemic as numerous nations in the continent are experiencing reduced export earnings, insufficient growth rates, inadequate investment opportunities, dwindling remittances and decreasing inflow of foreign direct investment. Therefore, there is the need for African economies to source for sufficient internal and external financial resources to increase economic growth as well as realise their development goals, which includes the Millennium Development Goals and the Sustainable Development Goals. Certainly, innovative finance is significant to Africa’s investment needs. Based on this, it was proposed that African leaders and governments ought to increase their potential sources of innovative finance, as well as endeavour to tackle the constraints that hinder innovative finance for development of the continent.