Abstract
The chapter explores the landscape of the financial regulation and governance of financial institutions in Africa. The chapter examines the efficacy of prudential reforms that have been implemented over the years, citing successes, failures, policy recommendations and trajectories for the future. The chapter also discusses the role of regulation and governance in either enhancing or limiting financial inclusion. The chapter finds that Africa has made significant strides in improving its financial sector regulatory and governance framework over the last decade. This has resulted in improved stability, financial depth and financial inclusion. The results show that regulations aimed at improving financial sector stability do not always lead to increased financial inclusion, while those meant to improve efficiency, governance and market conduct lead to improved financial inclusion. A number of weaknesses persist, however, in the financial sector regulatory landscape in Africa. These include weak supervision capacity, limited enforcement power and lack of political backing as well as politicization of the appointment of regulators. Further, many regulatory authorities lack the independence required for sound regulation in Africa.
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