collaborators across the continentpoints to one clear lesson—these goals are not competing, they are complementary if policy is coherent. First, on financial inclusion. Our 2026 study on the effect
of financial regulation on financial inclusion in the SADC region shows that regulation is a double-edged sword. Well-designed, proportionate regulation expands inclusion, while overly restrictive compliance requirements choke it.
The policy implication for SA and SADC regulators is to adopt risk-based, tiered regulation that encourages mobile money, agency banking and savings and credit co-operatives, rather than a one-sizefits- all approach imported from advanced economies. Second, inclusion must translate into productive credit. In our work on bank credit’s role in influencing economic growth in emerging markets, we find it is not just the volume of credit that matters, but its allocation. When bank credit flows to productive sectors such as manufacturing and SMEs, growth follows. When it is concentrated in consumption or speculative activities, growth stalls and asset quality deteriorates, as we also found in Ghana and Zimbabwe.
The SA Reserve Bank and National Treasury should therefore strengthen incentives for developmental lending, supported by effective credit infrastructure. Third, this must be done without undermining stability. Our research on Basel III capital regulation and bank profitability in emerging markets suggests that higher capital buffers do improve resilience, but they also compress profitability and can reduce lending if implemented abruptly. For SA, a gradual, well-communicated transition path for Basel III, coupled with support for banks to diversify income streams, will protect both stability and intermediation. Fourth, the green transition is no longer optional. Our studies on green technologyand energy consumption efficiency in Zimbabwe and on carbon tax and environmental quality in SA reach the same conclusion: green technology adoption significantly improves energy efficiency, and a carbon tax does improve environmental quality when properly priced.
However, technology adoption requires upfront investment and clear price signals. Government should expand targeted tax incentives and green finance facilities for firms investing in green tech and recycle carbon tax revenues to support vulnerable households and firms to adapt. Fifth, all of this requires fiscal capacity. In two papers on tax revenue mobilisation in the SADC bloc and in SA, we find a consistent result: ICT matters. Internet usage, mobile cellular subscriptions and digital automation significantly increase tax collection across all tax categories by reducing delays, evasion and administrative costs. Our separate study on foreign direct investment and tax revenue also shows that FDI only boosts revenue when institutional quality is strong.
The recommendation is straightforward: accelerate SA Revenue Service digitisation, invest in e-filing and mobile tax platforms, and close the digital divide across SADC. Sixth, the external sector remains vulnerable. Our recent work on inflation and exchange rate dynamics pass-through effects shows that exchange rate depreciation still feeds strongly into domestic inflation in the region. This limits the space for monetary policy. Managing this requires a mix of building foreign reserves, improving export diversification, and anchoring inflation expectations to reduce second-round effects.
Finally, the digital economy offers a new lifeline. Our forthcoming research on remittance inflows in a digital economy in Sub-Saharan Africa indicates that reducing the cost of digital remittances and formalising them can become a stable source of external finance, household income and even financial inclusion, especially when linked to mobilewallets. The policy package that emerges is integrated: regulate finance to include, not exclude; direct credit to productive uses; implement global standards at a local pace; use ICT to broaden the tax base; use carbon pricing and green incentives to drive efficiency; and harness digital remittances. Done together, SA can achieve growth that is both inclusive and sustainable.