By Peter Egwuatu
LAGOS— PricewaterhouseCoopers, PwC, yesterday, said the financial system in Nigeria and other African countries have contributed significantly to impede inclusive and sustainable growth in emerging markets.
It advised that policymakers, regulators and financial services organisations should more actively shape a financial system that is purpose fitted.
The PwC in its assessment of the emerging markets, said: “Not only has Nigeria by far the highest percentage of its population living in poverty, its financial system is also showing the least progress of all seven emerging markets.
“In five of the eight key areas, Nigeria’s financial system scores significantly below PwC’s fit-for-purpose targets, holding back inclusive and sustainable growth. However, the success of Nigeria’s auto-enrolment pension model is a bright spot.”
According to PwC “South Africa is on the right track, but with a long way to go. Although poverty reduction has stalled in recent years and it has the worst income inequality of all seven emerging economies, South Africa is showing the most progress towards a fit-for-purpose financial system. Four of the eight key areas for a healthy financial system are already supporting inclusive and sustainable growth and while more work is needed –for instance on the high levels of indebtedness – the country is moving in the right direction in the other four areas.
“While growth in emerging markets continues to outstrip developed counterparts and hundreds of millions of people have been lifted out of poverty, developing a well-functioning financial system remains critical to tackle poverty and sustaining economic growth over the long term. Emerging markets need a robust and broad-based financial infrastructure to channel funds efficiently, draw people into the market economy and enable them to share in the benefits,” it said.