Conduits of Capital – Onshore Financial Centres and Their Relevance to African Private Equity

This report by Z/Yen Group Limited for FSD Africa analyzes the role of onshore and offshore financial centres, with a specific focus on African cities. It utilizes the Global Financial Centres Index (GFCI) to categorize centres by connectivity, diversity, and specialty, while providing a roadmap for African centres to improve their competitiveness through infrastructure, business environment reforms, and human capital development.

• Financial centres are categorized by three determinants: connectivity (global reach), diversity (breadth of financial sectors), and specialty (depth in specific areas like investment management). Based on these, centres are profiled as 'Global Leaders', 'Global Diversified', 'Global Specialists', 'Global Contenders', 'Transnational' (Established, Diversified, Specialists, or Contenders), 'Local' (Established Players, Diversified, Specialists), or 'Evolving Centres'.
• The report distinguishes between onshore and offshore centres. Onshore centres do not primarily compete on tax permissiveness or lack of regulation. Offshore centres leverage constitutional independence to offer regulatory simplicity, tax mitigation, and secrecy, often acting as 'way stations' for international trade and investment flows.
• Among African centres in the GFCI 16 (September 2014), Casablanca is a 'transnational specialist' with wide North African connectivity; Johannesburg is a 'local, broad and deep' centre based on the local economy and mining; and Port Louis (Mauritius) is a 'local specialist' serving as an important domicile for African investment and private equity funds.
• Casablanca exhibits a significant 'reputational advantage,' meaning professional perceptions are more favorable than quantitative measures suggest. This is attributed to heavy spending on marketing, conferences, and promotion, leading the report to suggest the centre may be 'overtrading'.
• The report identifies a specific sequence for increasing a financial centre's competitiveness from 200 to 800 points on the GFCI scale: first, basic infrastructure; second, the business environment (from 400-600 points); third, financial sector development; fourth, human capital (from 600-800 points); and finally, reputational and general factors.
• Investors identify several critical barriers to Africa's investment climate, most notably the rule of law and corruption, the slow pace of decision-making and reform, and a lack of accurate, pan-African credit and company information.
• To improve African financial centres, the report suggests donors support the creation of a regional Financial Training and Qualifications Institute (FTQI) to provide vocational accreditation, the development of mutual AML and KYC 'passports' to ease cross-border entry, and the implementation of 'Policy Performance Bonds' to reduce political risk.

APA

FSD Africa (2015). Conduits of Capital – Onshore Financial Centres and Their Relevance to African Private Equity. https://fsdafrica.org/wp-content/uploads/2025/05/16-08-10-FSDA_EMPEA_Conduits-of-Capital_web_version-ZYEN.pdf

Chicago

FSD Africa. Conduits of Capital – Onshore Financial Centres and Their Relevance to African Private Equity. 2015. https://fsdafrica.org/wp-content/uploads/2025/05/16-08-10-FSDA_EMPEA_Conduits-of-Capital_web_version-ZYEN.pdf.

Wikipedia

{{cite report |author=FSD Africa |title=Conduits of Capital – Onshore Financial Centres and Their Relevance to African Private Equity |date=January 2015 |url=https://fsdafrica.org/wp-content/uploads/2025/05/16-08-10-FSDA_EMPEA_Conduits-of-Capital_web_version-ZYEN.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fsdafrica2015conduits, author = {{FSD Africa}}, title = {{Conduits of Capital – Onshore Financial Centres and Their Relevance to African Private Equity}}, institution = {FSD Africa}, year = {2015}, month = jan, url = {https://fsdafrica.org/wp-content/uploads/2025/05/16-08-10-FSDA_EMPEA_Conduits-of-Capital_web_version-ZYEN.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }