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Private sector strengthens Africa regional ties

Thursday, January 15, 2015

Subject

The role of the private sector in strengthening regional ties between African states.

Significance

Over the past decade, the African continent has experienced greater integration within and across its regions, especially through trade. While still lagging behind many other emerging market regions, this growth has been driven in large part by the private sector. More African companies are now expanding beyond the borders of their home countries. Private equity is playing an important role in funding this expansion, supporting companies with knowledge and experience to access broader markets.

Impacts

  • Commercial ties are pushing regulators to harmonise aspects of economic policy across borders, eg on banks and insurance firms.
  • Longer-term integration projects -- eg African Central Bank and African Monetary Fund -- are unlikely to succeed.
  • Firms from regional hegemons (Nigeria, Kenya and South Africa) will tend to have the greatest pan-Africa footprint.
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