Financialisation in Africa and South America: a systematic overview and comparison between Mozambique, Colombia, Mexico and South Africa

Financialisation research has focussed initially on the developed economies’ experiences, but the concept is now increasingly applied worldwide. Nevertheless, there are few systematic comparisons across African and South American economies. This paper fills this gap, providing an overview of the debate and identifying seven financialisation interpretations for comparison between Mozambique and other emerging economies such as neighbouring South Africa, and Colombia and Mexico, following the methodology developed by Karwowski and Stockhammer (2017): (1) financialisation as the result of financial deregulation; (2) foreign financial inflows; (3) asset price inflation; (4) the shift towards a market-based financial system; (5) business increasingly engage with financial markets; (6) high and rising household debt. Additionally, one final indicator is presented to compare (7) state financialisation (Karwowski & Centurion-Vicencio, 2018). As a result, it is possible to confirm the uniqueness of the Mozambican case with financialisation patterns pinpointed on two vectors: foreign financial inflows and state indebtedness. Asset price volatility is a result of the first pattern and not an isolated occurrence. Other characteristics associated with financialisation, such as market-based finance and companies and households’ indebtedness, are less prominent in Mozambique. Consequently, state financialisation and Mozambique’s dependence on foreign financial inflows curtails the conditions for a robust manufacturing sector, putting the country in a path dependence of growth based on simpler and extractive processes.