Front Matter

Front Matter

Montfort Mlachila, and Masafumi Yabara
Published Date:
September 2013
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    © 2013 International Monetary Fund

    Cataloging-in-Publication Data

    Joint Bank-Fund Library

    Mlachila, Montfort.

    Banking in Sub-Saharan Africa: the macroeconomic context/Montfort Mlachila, Seok Gil Park and Masafumi Yabara. – Washington, D.C.: International Monetary Fund, 2013.

    p.: ill.; cm.

    Includes bibliographical references.

    ISBN: 978-1-48434-453-8

    1. Banks and banking – Africa, Sub-Saharan. 2. Economic development – Africa, Sub-Saharan. 3. Financial institutions – Africa, Sub-Saharan. 4. Africa, Sub-Saharan—Economic conditions. 5. Macroeconomics. I. Park, Seok Gil. II. Yabara, Masafumi. III. International Monetary Fund.

    HG3881.5.M53 2013

    Disclaimer: The views expressed in this book are those of the authors and should not be reported as or attributed to the International Monetary Fund, its Executive Board, or the governments of any of its member countries.

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    Executive Summary

    This paper1 reviews the macroeconomic performance of sub-Saharan Africa (SSA) in the last decade and examines factors that have supported the region’s generally robust growth and challenges going forward. It also assesses the main features and performance of SSA banking systems, while drawing attention to new developments that are taking place in SSA’s financial sector. The main findings are as follows:

    • SSA’s sustained strong growth since the mid-1990s represents a sharp break with previous years; contributory factors include improved macroeconomic policies, trade and regulatory reforms, favorable commodity price trends and new resource discoveries, debt relief, and reduced levels of armed conflict in the region.

    • Most SSA economies showed significant resilience during the global economic crisis, with annual growth of regional GDP now running at 5.4 percent per annum. Adverse new developments in the global economy would slow the pace of SSA growth, but the impact, in most countries, should be modest rather than severe.

    • Banking systems in most of SSA remain underdeveloped as compared with other developing regions, but gradual financial deepening is under way in most countries. Impediments to development include the small size of national markets, low income levels, and weak creditor rights and judicial enforcement mechanisms.

    • Recent developments, such as the expansion of mobile phone–based banking and the spread of pan-African banking groups, have the potential to significantly change the landscape for banking in much of SSA, but they also introduce new challenges for financial regulators.


    Many countries in sub-Saharan Africa (SSA) have seen accelerated growth for an extended period since the mid-1990s, making a clear break with their long stagnant growth during the previous two decades. That said, the region faces significant challenges over the medium to long term, including reducing poverty, overcoming infrastructure bottlenecks, enhancing productivity and skill levels, and improving the business climate, among others. The banking sector remains underdeveloped in SSA, thus reducing its contribution to growth, although its limited integration with global financial markets helped countries weather adverse effects of the global financial crisis. It is imperative that the banking sector plays a more active role in SSA, in order to achieve sustainable growth led by the private sector.

    This paper, building on the recent literature on SSA, discusses the main features of the region’s growth and macroeconomic performance in recent years and the outlook for the coming years; it then reviews the main features of SSA banking systems and how they were affected by the global economic crisis, while flagging some factors that could influence financial sector developments in SSA in the period ahead.

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