Finance and economic development in Africa: Introduction and overview

It is clear that a lot remains to be learnt about the role of the financial sector in African growth and development process. All three papers in this volume focus on the existing consensus in the literature that there seems to be a positive relationship between financial development and economic progress. Harris aptly draws attention to the broad association between financial sector development and economic growth, and Murinde even suggests that financial development may be as important as human capital accumulation. Andersen et al., in turn, are more sceptical and bring out the existing ambiguities, both theoretical and empirical, underlying the finance-growth consensus. They highlight that existing empirical results are far from robust, a point also clearly subscribed to by Harris. Consequently, the contributors are agreed that the usefulness of the existing literature is severely constrained when it comes to drawing up policy relevant conclusions.