In her latest comment for The Banker, Dr Vera Songwe, Chair and Founder of the Liquidity and Sustainability Facility and Advisory Board Member of the Africa Capital Hub (ACH), challenges a persistent assumption in development finance.
The key message is clear:
Africa is not short of capital. It is constrained by liquidity and allocation.
Across the continent, an estimated $4 trillion sits within domestic financial systems, yet development financing needs remain unmet each year. The disconnect? Basel III, a global regulatory framework designed for deep, mature markets, can create unintended constraints in shallower financial systems.
The aim is not to dismantle the system, but to make it work better:
- Unlocking capital already within reach
- Redirecting capital toward productive investments
- Applying existing flexibilities with greater intent
Because when regulation designed for resilience limits the flow of capital into the real economy, the consequences go far beyond balance sheets.
Read the full piece at https://www.thebanker.com/content/2d78de09-f774-4534-8662-15c2b90831f3.