International financial centres, global finance and financial development in the Southern Africa Development Community (SADC)

The study evaluates the effects of global/international finance on financial development, as well as analyse the options for enhancing the flow of global finance, in the Southern Africa Development Community (SADC) region. The study is motivated by the seemingly disconnection between global finance and international financial centres and financial development in the SADC region. The study uses a cross-country dynamic panel model, and estimations established that countries with international financial centres contribute nearly double to pooled financial development in the SADC when compared to countries without. It was also established that global finance that is currently received by SADC countries has no effect on financial development in these counties. The study recommends strategies through which South Africa, a globally connected country, could link other SADC countries to global financial markets and help in driving the development of financial systems in these countries.   Key words: Financial development, global finance, international financial centres, Southern Africa Development Community (SADC).