Non-Bank Financial Institutions and the Attainment of Sustainable Development Goals: Could this be the Trump Card for Africa?

Ronald Rateiwa
Competition Commission South Africa and University of Stellenbosch Business School

Prof. Meshach Jesse Aziakpono
University of Stellenbosch Business School



In this article, the authors use the Johansen cointegration and vector error correction models within a country-specifi c setting to assess the potential of non-bank fi nancial institutions (NBFIs) to contribute to the attainment the Sustainable Development Goals (SGDs). Th is is done by empirically testing the existence of a long-run equilibrium relationship between economic growth and the development and NBFIs, and the causality thereof. Th e empirical assessment uses time-series data from Africa’s three largest economies, namely Egypt, Nigeria and South Africa over the period 1971- 2013. Th e results show that the long-run relationship between NBFI development and economic growth is relatively stronger in Egypt and South Africa, than in Nigeria. Th e nature of the relationship between NBFI development and economic growth in Egypt is positive and signifi cant, and predominantly bi-directional. Th is suggests that a virtuous relationship between NBFIs and economic growth exists in Egypt. For South Africa, though relatively weak compared to Egypt, the relationship is positive and signifi cant, suggesting the potential existence of virtuous relationship between the development of NBFIs and economic growth. For Nigeria, results are weak and mixed. Ultimately, the study concludes that in countries with more developed fi nancial systems, the role of NBFIs and their importance to economic growth are more pronounced, implying that there is hope for relying on NBFIs to achieve sustainable development goals.Download the full article