Financial Innovation to Help Fight Africa’s Economic Vulnerabilities
Cohen, Daniel
Financial Innovation to Help Fight Africa’s Economic Vulnerabilities - 2025.
11
In recent years, African economies have faced growing debt and liquidity challenges due to diverse a series of external shocks on international markets, compounded by regional- and/or country-specific vulnerabilities. This paper proposes a framework for an African Liquidity and Stability Mechanism (ALSM) to ease these pressures, which would offer tools aimed at liquidity support and crisis prevention. This mechanism includes instruments to stabilize borrowing costs, to hedge against commodity fluctuations, and enable sustainable debt restructuring. The ALSM would aim to improve access to affordable financing, to bolster resilience to external shocks, and to promote the development of robust financial markets across Africa.
Financial Innovation to Help Fight Africa’s Economic Vulnerabilities - 2025.
11
In recent years, African economies have faced growing debt and liquidity challenges due to diverse a series of external shocks on international markets, compounded by regional- and/or country-specific vulnerabilities. This paper proposes a framework for an African Liquidity and Stability Mechanism (ALSM) to ease these pressures, which would offer tools aimed at liquidity support and crisis prevention. This mechanism includes instruments to stabilize borrowing costs, to hedge against commodity fluctuations, and enable sustainable debt restructuring. The ALSM would aim to improve access to affordable financing, to bolster resilience to external shocks, and to promote the development of robust financial markets across Africa.
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