Responsible Finance Forum

Financing the Frontier – Inclusive Financial Sector Development in Fragility-Affected States in Africa

Thea Anderson and Diane Johnson

This think piece is a response to the recognition that inclusive financial market development in sub-Saharan Africa (SSA) faces new challenges. It argues that there is a triple justification for an increased focus on fragility-affected states in Africa (FASA). First, poverty is reducing, but the concentration of extreme poverty in fragile states is likely to increase. As SSA grows, there is a moral imperative to ensure the benefits are shared, and that no one is left behind. Second, levels of financial sector under-development in FASA are distinctly lower than non-fragile counterparts in SSA. If we believe that access to financial services and capital play a key role in poverty reduction, then this inequality must be addressed. Last, in spite of bright spots – many of which are highlighted in this paper – the response of the donor community of financial market shapers to the challenge of FASA programming has been relatively sluggish.