Bridging the Sustainable Finance Gap: A Comparative Analysis of Africa and Asia Within the Global Context

David Mhlanga
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David Mhlanga: The University of Johannesburg

Chapter Chapter 9 in Sustainable Finance and Business in Sub-Saharan Africa, 2024, pp 195-208 from Springer

Abstract: Abstract This chapter undertakes a critical comparative analysis of the penetration of sustainable finance in Africa relative to Asia and other continents, shedding light on the disparities and underlying factors contributing to the sustainable finance gap. By situating Africa within the global sustainable finance landscape, the analysis explores economic, regulatory, and infrastructural challenges that hinder the continent’s progress in sustainable finance while drawing lessons from regions with more advanced sustainable finance ecosystems. The chapter opens with a detailed examination of the current state of sustainable finance across continents, employing quantitative and qualitative data to map out the depth and breadth of sustainable finance practices globally, focusing on Africa and Asia. This comparison reveals the lag in sustainable finance penetration in Africa and highlights the continent’s potential for growth and the critical role of sustainable finance in achieving its sustainable development goals. Following this comparative analysis, the chapter delves into investigating the factors contributing to Africa’s sustainable finance gap. Economic challenges, including limited access to capital and market volatility, are discussed as significant barriers to the uptake of sustainable finance. Regulatory frameworks and the absence of conducive policies are identified as key obstacles, with a detailed exploration of how regulatory environments in Africa compare with those in Asia, where some countries have made substantial progress in embedding sustainable finance into their financial systems. The chapter also examines how infrastructural deficits in Africa, such as inadequate sustainable project pipelines and underdeveloped financial markets, impede the flow of sustainable finance, contrasting this with the situation in Asian markets, which have increasingly embraced green bonds and other sustainable finance instruments. Drawing insights from the analysis, the chapter proposes strategies to narrow the sustainable finance gap in Africa.

Keywords: Africa; Asia; Sustainable finance (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-74050-3_9

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DOI: 10.1007/978-3-031-74050-3_9

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