To achieve the Sustainable Development Goals (SDGs) and foster economic development, Africa needs to improve the access to affordable finance. With international financial markets remaining difficult to access due to rising interest rates, it is crucial for African countries to deepen their domestic financial markets. Specifically, promoting local currency financing and developing financial markets could significantly mitigate the impact of financial crises on national economies and make it easier to manage capital flows.
In-depth development of domestic financial markets can reduce dependency on foreign capital and the risks associated with exchange rate fluctuations. By strengthening local financial systems, African countries can support long-term investments, improve economic resilience, and enhance economic sovereignty. Local currency financing offers a buffer against global financial shocks, as it reduces exposure to external debt obligations in foreign currencies that can become more costly when exchange rates are unfavorable.