“Fintechs will drive innovation in the sector, prompting traditional banks to adopt new technologies to stay competitive,” says Anne Kibisu, a banking analyst at Deloitte Kenya.

New and existing banks will face new capital requirements enacted in December 2024 under the Business Laws (Amendment) Act 2024. By 2026, banks will be required to maintain KES10 billion ($77 million) in capital.

This development follows a similar capital increase in 2009, when the requirement was raised from KES250 million to KES1 billion. That change prompted mergers, including KCB’s acquisition of National Bank in 2019. Analysts predict a similar wave of consolidation as smaller banks struggle to meet the new capital targets.

The central bank reports that 12 banks face a combined capital shortfall of KES11.8 billion. To comply with the new requirements, these banks needed to raise KES3 billion by December 2024, KES6 billion this year, and eventually KES10 billion by 2026.

“These increased capital thresholds are designed to help banks absorb economic shocks and continue supporting sustainable growth,” said CBK Governor Kamau Thugge.

Since December 2023, 27 of Kenya’s 39 licensed banks have met the new capital requirement. The remaining 12, primarily smaller banks with limited branch networks, now face significant pressure to recapitalize or merge with larger institutions.

“We are actively exploring strategic partnerships to meet the new capital requirements,” said an executive from an affected bank. “Mergers are also being considered.”

The CBK is expected to guide the consolidation process, as it did during the 2015-2016 banking crisis, which saw the collapse of Imperial Bank and Chase Bank. By 2027, Kenya’s banking sector is expected to be more robust and consolidated.

Nandi-Ndaitwah secured 57% of the vote, defeating her main rival, Panduleni Itula of the Independent Patriots for Change (IPC), who garnered 26%. Itula, a former member of the Southwest Africa People’s Organization (SWAPO), struggled to unseat the ruling party, which has held power since Namibia gained independence in 1990. SWAPO, founded in 1960, has been the dominant force in Namibian politics for over 64 years. The election, marred by a controversial three-day voting extension, faced opposition protests, but Nandi-Ndaitwah’s victory stood, reaffirming SWAPO’s grip on power despite its declining voter base.

One of her first moves was a cabinet reshuffle, reducing the number of ministers from 21 to 14 and giving it a female majority for the first time, with eight women and six men. The move signals a push for gender inclusivity and, her supporters hope, greater governance efficiency and economic stability.

Nandi-Ndaitwah’s leadership will be tested as Namibia faces major economic and social challenges, including a 30% unemployment rate, 46% youth joblessness, slow GDP growth, and a rising 71% debt-to-GDP ratio. She finds herself with a tall order: to create jobs, tackle inequality, and drive economic reforms.

CBE Capital, a subsidiary of the state-owned Commercial Bank of Ethiopia (CBE), became the country’s first public-sector-backed investment bank. Meanwhile, Wegagen Capital, affiliated with Wegagen Bank, officially enters as a private-sector player, following Wegagen Bank’s recent listing on the Ethiopian Securities Exchange (ESE)—the country’s first stock market, expected to launch soon.

The newly licensed firms will focus on capital raising, mergers and acquisitions, and investment advisory, providing businesses with financing options beyond traditional bank loans. This move is part of Prime Minister Abiy Ahmed’s broader economic liberalization plan, aimed at modernizing Ethiopia’s heavily state-controlled financial system.

The licensing of investment banks is widely seen as a critical step toward integrating Ethiopia into global capital markets. Hana Tehelku, ECMA’s Director General, described the move as a “historic milestone” and urged the newly licensed firms to operate with “utmost integrity and commitment.”

The initiative is expected to attract foreign investment, increase financial stability, and support Ethiopia’s economic diversification. The country, Africa’s seventh-largest economy with a GDP of $126 billion, has long relied on agriculture and state-owned enterprises but is now seeking to develop a more competitive private sector.

Beyond economic liberalization, the ECMA noted the growing role of women in Ethiopia’s financial sector, pointing out that two of the newly licensed investment firms are led by female CEOs. This reflects a push toward inclusivity in an industry that has traditionally been male dominated. Ethiopia’s shift toward a market-driven economy is expected to reshape its financial landscape. The success of these new investment banks will be a key test of the country’s commitment to reform and economic modernization.

Founded in 2020, Vista Bank has built its reputation on providing innovative digital banking services that enhance financial inclusion and access across Nigeria and West Africa. By entering the French market, the bank seeks to foster cross-border trade between Africa and Europe, leveraging technology to facilitate seamless financial transactions. With no mention of acquisitions or partnerships in ACPR’s approval, Vista Bank is likely pursuing a greenfield investment, enabling it to tailor its services specifically for the European market and position itself as a bridge between Africa and Europe.

“This is a historic moment for Vista Bank as we expand our footprint beyond Africa into the heart of Europe,” said Simon Tiemtore, Vista Bank’s CEO. “The ACPR approval reflects the confidence in our financial strength, governance, and ability to meet global regulatory standards.”

With a strong presence in Ghana, Senegal, Burkina Faso, and Guinea, Vista Bank has gained recognition for driving Africa’s digital economy and promoting financial inclusion. Its entry into France aligns with its mission to integrate Africa’s economy into the global market, focusing on trade finance, corporate banking, and cross-border payment solutions.

France, home to a large African diaspora and a key trading partner for African nations, offers a strategic gateway for Vista Bank to expand its services. The United Nations projects 6% annual trade growth between Europe and Africa over the next decade, offering significant opportunities for the bank.

Vista Bank plans to launch its French operations by mid-2025, establishing a headquarters in Paris and targeting key economic hubs.

“France offers us a strategic gateway to Europe,” Tiemtore added. “We remain committed to delivering exceptional services to our clients as we drive financial inclusion and innovation globally.”

This development cements Vista Bank’s position as a rising star in African banking, advancing its vision of connecting Africa’s digital economy to the global financial system.           

The move is a cornerstone of an International Monetary Fund (IMF)-backed privatization program aimed at attracting private-sector investment and bolstering economic resilience.

United Bank offered a 30% stake, pricing 330 million shares at EGP13.85 each, valuing the bank at EGP15.24 billion (roughly $300 million). The institutional book-building process, which closed on November 25, 2024, generated demand exceeding six times the offered shares. The retail tranche, which closed on December 3, attracted extraordinary interest, with subscriptions surpassing 59 times the shares on offer. Altogether, the IPO garnered a demand for 2.85 billion shares, oversubscribing the offering by 8.6 times. United Bank shares began trading on December 10, under the ticker UBEE.CA.

During the bell-ringing ceremony, Central Bank of Egypt (CBE) Governor Hassan Abdalla emphasized the significance of the listing. “This historic IPO reflects the resilience and transparency of Egypt’s financial sector. It aligns with our broader commitment to fostering sustainable growth and attracting diverse investments,” he said.

Ahmed El-Sheikh, Chairman of the Egyptian Exchange, called the IPO transformative for Egypt’s capital markets. “This listing not only boosts market liquidity but also paves the way for future IPOs, cementing Egypt’s position as a leading regional financial hub,” he noted.

United Bank CEO Ashraf El-Kady expressed optimism about the bank’s growth trajectory. “The proceeds from this offering will strengthen our capital base, support our expansion plans, and enable us to deliver greater value to our stakeholders,” he said.

The IPO aligns with Egypt’s broader reform agenda to deepen its capital markets and divest state-owned assets, in line with IMF recommendations to promote private-sector participation. The overwhelming demand underscores investor confidence in Egypt’s economic potential, signaling that financial sector reforms are positioning the country as a focal point for domestic and international investment, even amid persistent economic challenges. The United Bank pivotal listing highlights Egypt’s success in attracting investor interest, showcasing its resilience against economic headwinds.            

The BDP suffered a crushing blow, winning just four of 61 National Assembly seats. Analysts cite mounting economic frustrations, especially among the young, as key to the party’s downfall.

Despite the political upheaval, Botswana—a nation the size of France but with a population of just over 2.4 million—remains a model of stability in Africa. Known for efficient governance, a well-functioning civil service, and prudent economic management, the country achieved upper-middle-income status in 2005, showcasing its resilience and progress.

Significant challenges persist. Poverty remains high, unemployment reached a staggering 27.6% in the first quarter of this year, and inequality levels are among the world’s worst. GDP growth is forecast at just 1% for 2024, down from 2.7% in 2023 and 5.5% in 2022. Driving the downturn is the contraction of the global diamond market, precipitated by reduced production and weakened demand, since diamonds account for 90% of Botswana’s foreign exchange earnings.

Fiscal expansion through government-backed construction projects is expected to cushion the downturn. Economically, Botswana ranked as Africa’s 28th-largest economy in 2023, with a GDP of approximately $21.4 billion. While modest compared to giants like Nigeria or South Africa, it stands out for its sound fiscal policies, strong governance, and strategic reliance on diamond exports.

Botswana’s eligibility for benefits under the African Growth and Opportunity Act (AGOA) has further bolstered its competitiveness, granting duty-free access to the US market for most locally manufactured goods, including diamonds. This has spurred business reforms, improved the investment climate, and strengthened bilateral trade ties. Botswana’s ability to navigate the current economic and social storms will determine its future stability and growth trajectory as it embarks on a new chapter in its politics under Boko’s leadership.

 The move comes as part of the Central Bank of Nigeria’s (CBN) broader efforts to address inefficiencies in the FX market, which has long been plagued by illiquidity, opacity, and multiple exchange rates. By introducing the Electronic Foreign Exchange Matching System (EFEMS), the CBN aims to create a more efficient and accessible market for all participants.

The most significant benefit of automation will be increased transparency. Under the current system, determining the real state of supply and demand in the FX market has been difficult, leading to market distortions, with insiders holding an advantage.

With EFEMS, real-time data on FX transactions will be available to the public, businesses, and international investors, allowing them to see market conditions clearly and make informed decisions. This shift is expected to level the playing field, reducing opportunities for bias and favoritism in foreign currency allocation.

Moreover, automation will improve efficiency. The manual, paper-based system currently in use often results in delays that frustrate market participants. With EFEMS, transactions will be processed much faster, eliminating these bottlenecks and allowing smoother operations for businesses reliant on foreign exchange.

While automating FX trades will not directly resolve all of Nigeria’s currency challenges, aligning the official exchange rate with market realities is expected to more accurately reflect the naira’s value.

Over-reliance on oil exports has made the naira vulnerable to external shocks, resulting in multiple devaluations. If the new system fosters a more transparent market, it could help stabilize the naira by narrowing the gap between official and parallel market rates. Still, EFEMS faces hurdles, such as the technology’s stability, widespread user adoption, and the CBN’s continued independence in enforcing policies. Automating FX trades represents a significant step toward creating a fairer and more efficient Nigerian market. If well implemented, the reform could restore investor confidence, reduce corruption, and strengthen the naira—helping Nigeria move toward a more sustainable economic future.           

China solidified its position as Africa’s largest bilateral trading partner last year, as trade with the continent reached a record $282.1 billion, up 1.5% from 2022. But a 7.5% surge in Chinese exports, to $173 billion, was not matched by imports from Africa, which fell by 6.7% to $109 billion, widening Africa’s trade deficit with China to $64 billion from $46.9 billion in 2022, according to China’s Ministry of Commerce.

African nations’ rising debt to China began raising sustainability concerns early in the last decade as more of them turned to the Eastern colossus to finance critical infrastructure projects. By 2023, several African countries had accumulated significant debt to Beijing, primarily on infrastructure and development initiatives.

Angola now owes China approximately $20 billion, mostly on energy and transportation projects. Ethiopia’s debt to China stands at around $13.5 billion, supporting projects like railways and industrial parks. Kenya, another major borrower, owes an estimated $9.8 billion, which it has used to fund projects including the Standard Gauge Railway (SGR) and road construction. Zambia’s debt to China is about $6.5 billion, focused on infrastructure and mining.

Beijing, accordingly, has become more cautious over the past decade, notes Jeremy Stevens, Asia economist at Standard Bank Group in Beijing.

“Even before the Covid-19 pandemic, Chinese lending was slowing down, a trend consistently reflected in the objectives set at FOCAC meetings since 2016,” he says. The Forum on China-Africa Cooperation (FOCAC), a key platform for Africa-China relations since 2000, held its ninth summit in Beijing last month amid rising geopolitical tensions, with China focusing on its position relative to other global powers, notably the US.

American policy toward Africa has long been driven by security concerns, especially since the 9/11 terror attacks in 2001, which reshaped alliances across the continent. Washington maintains a strong security presence, including a permanent base in Djibouti and several facilities in East and West Africa and the Sahel, focusing on counterterrorism, notes Peter Stein, CEO of Stein Brothers AB, Sweden.

“Unlike China’s broad agendas, US policy has traditionally relied on targeted programs,” he says. In recent years, however, as Cold War-like dynamics reemerge, US strategy for sub-Saharan Africa has become more comprehensive. The continent’s geopolitical significance is rising, driven by a booming population, critical mineral resources for the green energy transition, and a growing role in multilateral institutions.

“The geopolitical relevance of the continent is set to increase dramatically,” says Stein.

Accordingly, China’s involvement in Africa goes beyond trade, encompassing a mix of economic investments, geopolitical strategies, and local challenges. The Belt and Road Initiative (BRI), which China launched in 2013 to foster global connectivity and trade routes, assigns Africa a pivotal role within its system of maritime and land corridors.

By 2023, Beijing’s cumulative investments in Africa surpassed $300 billion, primarily in telecommunications, energy, and transportation, according to the China Africa Research Initiative at Johns Hopkins University.

“In recent years, Chinese infrastructure loans have boosted growth in recipient countries,” says Lucas Engel, data analyst at the Global China Initiative, Boston University. “Chinese-financed projects have had positive spillover effects on broader economic activity in Africa, something not as evident with World Bank loans.”

Kenya has emerged as a regional hub benefiting from significant Chinese investment, notably in infrastructure projects like the SGR. Ethiopia has also embraced Chinese interest, particularly in infrastructure and the financial sector, where Chinese banks have partnered with local institutions.

Djibouti, strategically located in the Horn of Africa, hosts China’s first overseas military base alongside the tiny nation’s US Navy station, symbolizing China’s expanding naval presence and strategic interest in securing access to African markets. Tanzania, on the other hand, has taken a balanced approach to Chinese investments, notably with the Bagamoyo Port project, reflecting bilateral cooperation to enhance trade capacities.

“They have also invested in real estate, purchasing property and establishing small ‘Chinatowns’ to cater to the growing Chinese expatriate community involved in ongoing projects,” Msita says, in addition to major infrastructure projects like the SGR and the Julius Nyerere Hydropower Station.

All this, combined with growing imports of Chinese goods ranging from electronics to machinery, has made China Tanzania’s largest trading partner. The East African nation, in turn, exports agricultural products like cashew nuts and minerals to China. Trade between Tanzania and the US, while significant, is less diversified, focusing mainly on agricultural exports under the African Growth and Opportunity Act.

Several African countries have faced significant challenges in servicing their Chinese loans, with some defaulting or at risk of default. Zambia became the first African country to default on its sovereign debt in 2020, during the Covid-19 pandemic, as it struggled with approximately $6.6 billion owed to Beijing. Similarly, the Republic of Congo faced difficulties in 2019 when it owed around $2.5 billion, leading to debt restructuring negotiations.

In 2021, Angola, with about $20 billion in debt to China, was at risk of default as it struggled with low oil prices and the pandemic. Djibouti, in 2018, risked default on $1.4 billion in Chinese debt, accounting for over 70% of its GDP. More recently, in 2023, Kenya, with approximately $9.8 billion in Chinese debt, faced challenges repaying loans, particularly those related to the SGR, raising concerns about potential default.

In response to China’s rise in Africa, and perhaps to take advantage of its difficulty maintaining some of its lending programs, the US has recalibrated its engagement with the continent. Strategies have included deals like the US-Kenya Free Trade Agreement, signed in 2020 and aimed at establishing a free-trade area and setting standards for future US-Africa trade relations.

The Prosper Africa initiative, launched in 2019, aims to double two-way trade and investment between the US and Africa, leveraging private-sector engagement and facilitating market access. The US International Development Finance Corporation, established in 2019, now plays a pivotal role in financing projects across Africa, focusing on infrastructure, energy, and health care.

Chinese investment in Tanzania extends beyond infrastructure, notes Masele Msita, senior manager of Strategic Partnerships and Alliances at CRDB Bank, Tanzania, extending into the retail sector with supermarkets and stores selling Chinese goods becoming increasingly common.

Additionally, the US has promoted the Build Back Better World initiative, launched in 2021, to mobilize investments for sustainable infrastructure development in Africa, emphasizing transparency and high standards as alternatives to the BRI. Security cooperation, led by the US Africa Command (AFRICOM), remains a key component of US policy, focused on enhancing military partnerships and countering security threats in regions like the Sahel and the Horn of Africa.

None of this means that China’s engagement and investment in the continent will fade.

“Dwindling Chinese loan amounts in recent years may give the impression that economic ties are weakening, but this is misleading,” says Lucas Engel. “Chinese lenders are still disbursing funds from existing loans and African borrowers are servicing existing debts. However, the rise in interest rates globally has heightened concerns about debt servicing in Africa.”

Under the International Monetary Fund’s Heavily Indebted Poor Countries (HIPC) initiative, Somalia received total debt relief of $4.5 billion on December 13th. The relief package reduces Somalia’s debt-to-GDP ratio from 65% to around 6%, removing a major stumbling block to the recovery of one of the world’s most troubled nations.

The country descended into clan warfare following the overthrow of the government of Mohamed Siad Barre in 1991 and subsequent failed attempts by the US and other powers to stabilize the nation.

Over the past 15 years, Mogadishu’s successive governments, struggling to exert control over a divided nation, have faced an Islamist insurgency led by the al-Shabaab militant group. Thousands have perished in conflicts and attacks as al-Shabaab extended its violence beyond Somalia, including the 2013 assault on Nairobi’s Westgate mall, which resulted in 71 casualties. The current government, led by President Hassan Sheikh Mohamud, claims progress in suppressing al-Shabaab but now contends with one of Somalia’s worst droughts in living memory.

Officials close to Mohamud view the debt write-off as a pivotal event, endorsing the administration’s efforts to address deep-seated economic and political challenges. The deal would enable Somalia to access concessional loans, fostering economic reform and laying the groundwork for sustained growth.

Ahmed Soliman, a researcher at the Chatham House think-tank, described the IMF’s decision as lifting a substantial burden off Somalia’s shoulders, allowing it nation to focus on economic priorities, poverty reduction, and job creation: all essential to achieving long-term stability, according to the Financial Times.

The IMF and the World Bank’s International Development Association approved the write-off after Somalia fulfilled 13 of 14 requirements related to expenditures, tax collection, governance, statistics, and poverty alleviation.

Under the agreement, bilateral creditors forgave $3 billion in debt, with Russia granting debt relief of $684 million in July. The process, spanning almost a decade, also marks a thaw in Somalia’s relations with the global community; the UN Security Council last month lifted a 32-year arms embargo on arms deliveries to the government in Mogadishu.

The restructuring has been in motion since June, when the Finance Ministry reached preliminary agreements with its official creditors, including China and members of the Paris Club. Next, each official creditor will initiate internal processes to formalize the MoU. The terms outlined in the document will then be implemented through bilateral agreements with individual members of the Official Creditor Committee.

Key components of the agreements will include an average extension of debt maturities of more than 12 years and a structured interest rate, beginning at 1% and gradually increasing to 2.5% over the next 14 years. An additional mechanism allows for increased payments if Zambia’s economic performance exceeds expectations. Zambia will make payments of some $750 million over the next decade, drastically reduced from the nearly $6 billion it owed its official creditors before the restructuring.

The next crucial step is securing a comparable agreement with private creditors, Finance Minister Situmbeko Musokotwane noted, including international bondholders.

Zambia is currently in formal discussion with a bondholder creditor committee to restructure more than $3 billion of overseas bonds. Negotiations began last month, and since then, creditors have been restricted from trading the country’s bonds. According to Reuters, Zambia has three outstanding dollar bonds, maturing in 2022, 2024, and 2027, that are presently trading at between 52 and 58 cents on the dollar. While the exact timeframe for finalizing agreements between Zambia and individual bilateral creditors remains uncertain, the government says it is firmly committed to securing a deal with private lenders that aligns with the terms with its official creditors. Musokotwane expressed gratitude to the latter, particularly China, France, and South Africa, for their dedication to resolving Zambia’s debt challenges. Despite a brief miscommunication concerning the signing of the MoU, Zambia appears to have a path to financial recovery.