Historically, Mauritius voters have a reputation for speaking in absolute terms. They lived up to it last month, when they chose Navin Ramgoolam, the candidate of the Alliance du Changement (ADC) coalition, to form a new government as prime minister.

Ramgoolam’s victory against incumbent Pravind Jugnauth was a rout. The ADC won 60 of 62 seats in the National Assembly, underscoring public exasperation with Jugnauth’s seven-year rule.

Although the return of Ramgoolam, 77, who had served three previous terms as prime minister, was a shocker, the rising cost of living, a pension crisis, corruption, the muzzling of freedoms, and other grievances made the island nation a fertile ground for his win. The real task will be honoring his promises for significant changes in governance and socio-economic management, observes Pritish Behuria, associate professor at the University of Manchester’s Global Development Institute.

Ramgoolam’s goals include dismantling the country’s spying system, so that “Mauritians will be free to talk.” Another priority is addressing the cost of living by stopping the rupee’s freefall and ending a value-added tax on basic commodities.

The currency’s nosedive has been a major concern, with its value dropping 30% over the past five years. The trend has continued for the better part of this year. A public debt burden of about $10 billion isn’t making the situation any easier.

An urgent need to stabilize the macroeconomic front has already prompted Ramgoolam to make an immediate change at the Bank of Mauritius. Following his recommendation, Rama Krishna Sithanen has taken over as central bank governor, replacing Harvesh Seegolam, who was serving his third tour in the post.

A former finance minister, Sithanen is credited for financial reforms that achieved economic diversification. “Sithanen faces the burden of steadying the currency to reduce the negative spillover of higher cost-of-living pressure on the economy,” notes Churchill Ogutu, an economist at Mauritius-based IC Group.

United Bank for Africa (UBA) is celebrating its 75th anniversary. Among its hallmarks is an unwavering commitment to driving the growth of small and midsize enterprises (SMEs) in Africa.

For UBA—boasting $20 billion in assets, $454.2 million in pretax profits in 2023, and a presence in 20 markets on the continent and four global centers—empowering SMEs means fueling Africa’s economic development.

Its home market of Nigeria is a poster case. With a portfolio of over a million SME clients and a loan book of $90 million, the bank has been instrumental in ensuring that SMEs remain the engine of growth.

Last year, the bank set aside $6 billion to lend to SMEs in partnership with the Africa Continental Free Trade Area secretariat, a program to be implemented over three years. The partnership augments the bank’s defining strength: its ability to support intra-African trade and investments critical for SMEs’ growth.

To enhance convenience for SMEs, UBA has signed up to the Pan-African Payment and Settlement System. The bank also ensures easy transaction processing through its UBA Afritrade and UBA Connect.

UBA has also become a pacesetter in financing women-owned businesses, owing to its strong belief that women should not be left behind in Africa’s socioeconomic development. —John Njiraini

In making this award, the Global Finance team notes DBS’ close focus on the specialized needs of SMEs—from the clarity of the CEO’s mission statement to the detailed structure and effectiveness of the bank’s SME products.

Outgoing DBS Group Chief Executive Piyush Gupta, who will step down in March 2025, has acknowledged that banks worldwide underserve SMEs. Under his guidance, DBS has worked to rectify this failure.

Together with Enterprise Singapore, DBS launched the ESG Ready Programme, an end-to-end program that aims to help local businesses—especially SMEs—become future-ready by building capability and capacity in sustainability. Participating companies can access a panel of sustainability specialists to guide them on their respective sustainability journeys.

“Banks have not thought enough about the battleground of tomorrow,” said Gupta in a 2015 interview with the National University of Singapore’s Business School. “But it is changing—in the last two years, digitization has now become the No. 1 agenda for most banking CEOs.”

Before the pandemic, DBS had relentlessly leveraged emerging technologies to help SMEs, especially micro and small enterprises, streamline services and manage credit risk. Digital payments, online banking, and blockchain technology emerged and became established during Gupta’s tenure, emphasizing SMEs.

The judges noticed that DBS had developed algorithmic models powered by artificial intelligence (AI) and advanced data analytics to alert the bank to signs of potential trouble SME customers might face, substantially reducing insolvency risk.         —Simon Littlewood

In operation for over 80 years, Banreservas offers more than 315 physical service centers in the Dominican Republic—including traditional bank branches, mini branches, and mobile branches—along with roughly 1,900 ATMs. SMEs account for 16% of the bank’s business, or approximately $1.5 billion, giving Banreservas a 28% market share.

Banreservas offers its roughly 130,000 SME clients a broad array of financial services. Fomenta Pymes (“Promotes SMEs”) is a bank program providing small businesses access to financing products, credit cards, management services, payroll services, and other benefits. Special events include monthslong “loan fairs” through which SMEs shop for financing. In its 2024 iteration, the Banreservas loan-fair program disbursed 5,800 loans, totaling about $238.5 million. These were given to SMEs working in multiple sectors: tourism, construction, commerce, education, healthcare, social services, industry, agriculture, and livestock, among others.

Additional bank offerings include Programa Preserva, a workshop-based program that promotes economic security through saving. Programa Coopera, meanwhile, promotes the Dominican Republic’s socioeconomic development through financial support of businesses throughout the country, including those located in economically vulnerable areas.   —Laura Spinale

SMEs contribute 15% to Grupo Financiero Banorte’s loan portfolio. The financial institution works to better serve that market through an SME expansion plan instituted over the past year. As part of this program, Banorte has focused on increasing its SME offerings to include a full suite of tailored financial products and services. These include various loan types, business advisory services, tax advisory services, and strategic alliances with companies offering products and services of value to the SME market.

Credit is a significant part of the SME expansion plan; and the bank has instituted a new pricing structure, providing credit conditions more favorable to clients. SMEs qualify for these rates through an application process that provides a more holistic view of each SME applying. Available SME financing products include working capital loans, equipment financing, expansion loans, and lines of credit. One of these, Mujer PyME, is a credit facility targeted to women-led SMEs.

Additional advancements include the integration of biometric signatures in branches and a time-saver for account openings.          —LS

Located in Moldova, MAIB is this year’s regional winner for Central and Eastern Europe. As the country’s largest commercial bank and lender, MAIB has almost 37,000 active customers, an increase of about 13% year-over-year (YoY); and it captures approximately 43% of all newly registered companies in Moldova. MAIB has continued to consolidate its position within the SME sector—about 6,000 companies, primarily within IT, winemaking, and food industries—earning the bank an approximately 37% market share. Despite challenging economic conditions, various strategic efforts have helped the bank achieve record growth within its SME business unit

The bank leverages a customer-centric approach by using feedback to tailor products and services to SMEs. MAIB also emphasizes data-driven decisions, which have helped the bank maintain a profitable loan portfolio despite a declining demand for loans among SMEs, fluctuating grain prices resulting from regional conflicts and weather conditions, and falling interest rates.

To help attract SME customers, MAIB launched internet and mobile banking solutions. The bank created its Business Banking Customer Care Service, which has a dedicated line for SME support and specialists who can resolve customer issues. MAIB’s products and services include night and weekend payments, remote onboarding, factoring, and digital signatures on credit contracts.

The bank has partnered with over 150 companies that sell their products, such as agricultural machinery, photovoltaic panels, and cars, through loans that MAIB originates. The bank is also the first in Moldova to offer consulting services to its customers in accounting, business, and human resources.        —Andrea Murad

BTG Pactual Empresas’ SME lending portfolio reached 22.1 billion Brazilian reais (approximately $3.9 billion) in the first quarter of 2024, with its SME credit book growing 52% YoY. SME business now accounts for 12% of BTG Pactual’s total portfolio.

The bank attributes its SME growth in part to its digital capabilities. Its digital platform offers a complete, integrated portfolio of SME products and services—providing access to the bank’s credit, guarantees, insurance, investments, foreign exchange, and derivatives products. Associated services accessible via the platform include creation of invoices payable by QR code; online invoicing; instant electronic bank transfers; open banking; payments to suppliers, tax authorities, and utilities; budgeting and categorized spending services; digital receipts; and other capabilities. The platform offers more than 45 integrations, including Telegram and Google Workspace, along with an extensive range of productivity improvement products.

Speed is a crucial platform benefit. According to the bank, the platform enables the bank to disburse 95% of its loan funds in less than 10 minutes, 16 times faster than its competitors.

Agriculture is a big part of the Brazilian economy, and BTG Pactual Empresas offers services tailored to this sector. These include credit lines for agricultural products (fertilizers, pesticides, seeds); equipment financing; and infrastructure financing for the construction of silos, warehouses, and other facilities.

Activities addressing environmental, social, and governance (ESG) issues are also important to BTG Pactual. Of its loans to corporations and SMEs, 72% are subjected to social, environmental, and climate-risk analysis, in line with international best practices. R$8.9 billion of its lending portfolio aligns with the bank’s sustainable financing framework.          —LS

Founded in 1992 by the Bahraini government, Bahrain Development Bank (BDB) is part of that country’s efforts to diversify its economy into non-oil-producing sectors. SMEs are vital to those efforts. BDB strives to support entrepreneurs and SMEs through loans, financing, and advisory and mentorship programs and conferences tailored to the SME market.

The bank offers financial products for various types of SME businesses, including agriculture and fisheries, manufacturing, education, health-care, tourism, and transportation companies. It also provides financial services targeted to women. Over the last several years, the bank has invested in digital transformation. One result of that is tijara, BDB’s digital banking arm. This platform offers SMEs quick access to financing and efficient processing of business transactions, salary transfers, and other payment services.          —LS

In September, the Royal Bank of Canada (RBC) released its annual small-business poll. Results indicate that 51% of Canadians are considering starting a businesses. RBC wants to help them.

The bank operates in more than 30 countries and serves more than 17 million clients worldwide. As of 2023, it had about CA$3.6 trillion (approximately $2.6 trillion) in assets and over 91,000 employees. To improve the customer experience, RBC has invested heavily in digital banking and AI technologies.

RBC strives to support SMEs at every stage. The bank offers various financing and loan options for SMEs, including unsecured and operating lines of credit. It also administers Canada Small Business Financing Loans. Special programs target Black entrepreneurs.

A knowledge base on the bank’s website instructs would-be entrepreneurs at the very earliest business stages. Guides for starting a business, validating ideas, creating business plans, determining startup costs, choosing a business structure, and exploring business financing are available.

Beyond typical banking, RBC also offers several business services, mostly digitized. In the field of payment processing, it offers medical billing software for hospitals and clinics, point-of-service systems, and services enabling merchants to offer buy now, pay later options to their clients. Marketing services help SMEs explore consumer spending patterns, find clients, and embark on global trade. The bank offers a host of payroll and HR solutions. Operations services help entrepreneurs register and incorporate online, protect businesses against cyber threats, automate accounts payable, and perform other tasks.       —LS

Headquartered in Spain and with operations throughout Western Europe, Santander is named as the best bank for SMEs in Western Europe for the third year in a row. The bank has a wide range of targeted products and services to meet the needs of its customers, which include 114,000 SMEs that make up over 91% of corporate customers and over 95% of digital customers in Portugal.

Through its platform, Santander X, the bank has helped over 7,000 SMEs scale their businesses through training, advice, and other resources. The platform’s training enables SMEs to create a digital presence, expand domestically and internationally, and grow and maintain their workforce. Companies can also participate in competitions for cash prizes and other awards. In addition, this platform creates a global networking community for SMEs to connect with other businesses, providing discounted third-party resources and services.

Through various initiatives, Santander supports SMEs looking to expand abroad. Through the Santander Trade platform, SMEs can analyze different international markets, find international business partners, and support shipments overseas; while the Santander Trade Club helps SMEs find new distributors and suppliers. The bank’s “One Europe” strategy helps identify good practices in other countries—practices that can then be implemented domestically.

The bank develops products and services with the customer in mind, through engagement and solicitation of feedback. The result is personalized products across digital channels and enhanced user experiences.  —AM

This continues to be the case with the appointment last month of a new president, Taye Atske Selassie. Previously foreign minister and a seasoned diplomat, Taye replaces Ethiopia’s first female president, Sahle-Work Zewde.

The changeover is significant, following a fallout between Sahle-Work and Prime Minister Abiy Ahmed. To many, Abiy has morphed from a global hero, who in 2019 received a Nobel Peace Prize, to a pariah criticized for silencing dissent and widely condemned for his conduct of a two-year war against rebels in Tigray province.

As a close ally of Abiy, Taye risks blemishing his reputation in taking up the largely ceremonial role of president, according to Abdalla Ahmed Ibrahim, director at the East Africa Center for Research and Strategic Studies in Nairobi. But he also has the credentials needed to argue that the Abiy’s government now wants to extend a hand to its rivals at home and abroad, “promoting national unity and international relations,” Ibrahim adds.

Internally, Ethiopia is grappling with ethnic tensions. The Tigray war might be over, but pockets of rebellion are appearing across many regions.

Externally, investment in a controversial hydroelectric dam and a quest for direct access to the sea through a deal with the breakaway region of Somaliland have irked Egypt and Somalia, respectively. The Horn is on edge, with Egypt supplying arms to Somalia, Ethiopia’s often hostile neighbor.

“Ethiopia can expect President Taye to focus on peace, stability and economic growth,” Ibrahim says.

The new head of state has promised to bring harmony not only to the war-torn country but across the region. Over four decades as a diplomat at the UN and in Egypt, and other countries affords him the necessary experience and exposure.

Economic growth, reducing poverty, and promoting equality are other critical areas Taye intends to focus on. Growth has averaged 10% annually over the past decade and half, but poverty and inequality remain rampant in Africa’s second most populous nation.

Chapo, the ruling party Frelimo’s candidate, carried the day and will replace Filipe Nyusi, who is stepping down after eight years in office. Frelimo, which has been in power since independence in 1975, has seemingly been blamedfor all the ills afflicting resource-rich Mozambique. Hailing from a new generation of leaders born after independence, Chapo has promised to delink from the past. However, few believe the former radio announcer and governor of Inhambane province will shake the old guard’s tight control of Frelimo.

He takes over a country endowed with bountiful resources but that remains in a state of socioeconomic paralysis. Of Mozambique’s population of 35 million, 65% live below the poverty line, up from 46% a decade ago.

Corruption and poverty are not its only chronic afflictions. A high unemployment rate, fragile security due to ongoing insurgencies, climate-related risks, and poor infrastructure keep Mozambique on the brink.

A silver lining is liquefied natural gas (LNG), which is fueling an economic transformation. Last year, Mozambique raked in $1.7 billion from LNG exports, up 218% from 2022. Foreign direct investment, mainly in the extractive sectors, is booming, with $650.5 million in new FDI was announced in the first quarter. “Mozambique’s economic outlook is improving due to a surge in LNG and other extractive revenue,” says Robert Besseling, CEO of risk and intelligence advisory Pangea-Risk. As it has after previous elections, Mozambique will bounce back, he predicts, as the destabilizing effects of the chaotic recent voting prove minimal.

Africa’s largest natural gas producer posted a 4.1% growth last year. The Bank of Algeria (BoA) maintained its nominal interest rate at 3%, unchanged since 2020. “Monetary policy remains accommodative,” comments the World Bank in its latest country report. In April 2023, Governor Taleb lowered reserve requirements to contain prices from 3% to 2%. Inflation, which hit 9.3% in 2023, eased to around 3% in April on lower food and import costs, but jumped up to 6.42% in July. While hydrocarbons still dominate the economy, the authorities and the BoA are focused on modernizing the banking system to boost private sector growth and investment. Significant milestones in 2023 include a new Banking and Monetary law, Algeria’s adhesion to the African Continental Free Trade Agreement (AfCFTA) and a reform of state-owned banks. Credit Populaire d’Algérie (CPA) became the first bank to list on the Algiers Stock Exchange, floating 30% of its shares in March. Banque de Développement Local (BDL) is expected to follow suit. Algerian banks are also increasingly scaling abroad, particularly in Europe and Africa. On the digital front, the central bank has made strides with the launch of a new website, enhancing the accessibility of its data and publications. Mobile payments saw significant improvements, particularly in terms of interoperability among digital payment solutions. However, further progress is necessary for Algeria to open up to global finance fully.

Tiago Dias’s first 16 months as governor of the National Bank of Angola (BNA) have brought about little cheer. Economically, it has been a season of turmoil. Gross domestic product (GDP) growth plunged to 0.7% in 2023 from 3% in 2022. Last year, Angola’s exports, 95% of which consist of oil, dropped substantially. Public debt increased to 73.9% of GDP compared to 56.1% in 2022, driven by a significantly weaker exchange rate. Inflation has risen to its highest level in the past two years, hitting 31% in June before falling slightly to 30.53% in August. The local currency, the Kwanza, has lost about 37% of its value in the past 12 months as the consumer price index marched steadily to a record level in August. For BNA, the macroeconomic chaos has called for firefighting, characterized by a considerable tightening of the monetary policy. Since the beginning of the year, the apex bank raised its repo rate 150 basis points to 19.5% in May, leaving it steady at its September meeting. Though inflation is forecast to remain elevated, BNA hopes the tightening sets the tone for a steady decline with a target of around 7% by 2028. While discharging its core mandates has proved challenging enough, BNA is also grappling with rising threats of cyberattacks. In January, it suffered an attack that was luckily mitigated without significantly impacting its infrastructure and data.

Despite being one of the Gulf countries with a small pool of oil to draw from, Bahrain’s economy is resilient. In 2023, Manama posted a 2.5% growth, while inflation stood at just 0.1%. With the local currency pegged to the dollar, the Central Bank of Bahrain (CBB) aligns its monetary policy to the US Federal Reserve’s. The CBB cut its one-week deposit rate to 5.75% in September after the Fed reduced its benchmark rate, and the overnight deposit rate to 5.5%. Governor Khalid Humaidan was appointed in February 2024, taking over after Rachid Al-Maraj’s nineteen years in office. A former BNP Paribas executive and CEO of Bahrain’s investment promotion agency, the Economic Development Board (EDB), Humaidan is expected to steer the CBB and the banking sector in supporting the country’s shift away from oil. Priorities will include developing and regulating fintech, Islamic finance and climate finance. It is too early, however, for Global Finance to evaluate his performance.

The principle of rotation catapulted Bangui to the helm of BEAC in March this year. A trained economist and computer expert, the Central African Republic national has been a BEAC insider for two decades. This makes him well-versed in the bank’s operations, particularly in balancing the interests of member states. His assumption of the governor’s office coincided with the Central African Economic and Monetary Community (CEMAC) marking its 30th anniversary. Reality shows the bloc has failed miserably in terms of integration. Members conduct a mere 4% of trade with each other, while the bloc ranks as the least developed and poorest in Africa. Bangui acknowledges the bloc is facing colossal challenges and has promised to consolidate monetary and financial stability to drive growth. In the immediate term, BEAC opts for an accommodative monetary policy stance due to relative stability. In June, it left the benchmark policy rate unchanged at 5% for the fifth time in a row, forecasting that inflation across the region will dip to a still high 3.9% this year. This was informed by low inflationary pressures at a rate of 4.5% in the first quarter. Though Bangui is not losing sleep on the monetary side, the state of the banking sector worries him. The capital adequacy ratio in the industry has plunged to 11.8%, meaning that many banks are severely undercapitalized. Government lending, on the other hand, has surged to 31% of total assets compared to 10% in 2015.

Dekop became the Bank of Botswana (BoB) governor in October last year, succeeding Moses Pelaelo. An economist with deep roots in public service, particularly in steering the country’s critical mining sector, Dekop’s one year in office has been a mixed bag of fortunes. On the negative, Botswana’s economy is under strain. GDP growth decelerated from 5.5% in 2022 to 2.7% last year and is forecast to nosedive further to 1% in 2024. The main factor has been a sharp decline in diamond production and mining activities. The weaker performance of the non-mining sectors and El Niño induced drought has exacerbated the situation. On the positive, the pula remained largely stable, depreciating by a marginal 1.8% in 2023. Inflation remains in the BoB’s band range of 3%-6% despite a sharp swing in July, hitting 3.9% in August, up from 2.8% in June. The BoB has assessed the risks to the trajectory to be balanced.

For this reason, the apex bank has continued its monetary policy easing stance. It cut its policy rate by 25 bps in August from 2.15% to 1.9%, following another 25-bps cut in June. Cutting the rate is expected to spur economic activity by further expanding credit to the private sector. Last year, the banking sector recorded an 11.4% credit growth to businesses with non-performing loans (NPLs) at a low of 3.7%.

The Economic Community of West African States (ECOWAS) is in a state of pandemonium. Burkina Faso, Mali and Niger have quit the bloc. They signed a treaty in July to become a confederation, the Association of Sahel States. Part of their economic integration plans involves ditching the regional currency, the CFA Franc. For the BCEAO, the unfolding developments do not augur well for the bloc’s monetary union endeavors. Coming when the creation of the eco, the desired future regional currency, is proving challenging and lengthy, navigating the murky waters is becoming a big test for Governor Brou. Despite reaffirming his support for the eco, Brou has primarily become an observer as member countries tussle. The BCEAO boss is, however, taking comfort from the stability on the macroeconomic front. In its three quarterly monetary policy meetings in March, June, and September, the apex bank has held its key rate unchanged at 3.5%. Inflation jumped to 4.1% in the second quarter from 2.8% in the first, in part due to increased costs of imported food items; the BCEAO forecasts inflation will average 3.7% for the year, exceeding its target zone of 1% to 3%. Economic activity also remains dynamic, with GDP growth projected to reach 6.1% compared to 5.3% last year. BCEAO is pushing to raise the minimum paid-in capital to $32 million in the banking sector to consolidate stability.

Egypt seems back on track after securing over $50 billion in support from international partners in early 2024. As a result, the Central Bank of Egypt’s (CBE) reserves soared to an all-time high of $46 billion this summer. In exchange for what many observers describe as a bailout, the CBE agreed to tighten its monetary policy and float the pound. Abdalla raised the deposit rate by 600 bps to 27.75% in March and maintained it at that record high in September. He also introduced exchange rate flexibility, which helped close the gap with the black-market rates but led to an immediate 40% drop in the Egyptian pound’s value. “Having two exchange rates has been a disease suffered by the country, and it was an economic risk that had to be confronted,” Abdallah told the local press. Although the governor claims not to “target a specific exchange rate,” the CBE had previously reversed devaluations when the pound dropped too low. For foreign investors, exchange rate stability is crucial, and the CBE’s ability to stick with this policy is pivotal to Egypt’s economic future. At home, Abdalla’s top priority is controlling inflation, which hit 33.9% in 2023, far exceeding the CBE’s single-digit target. Despite the reforms, inflation remained high at 26.2% in August 2024.

Nevertheless, Egypt’s banking sector stands strong. Local lenders are some of the biggest in the Middle East and Africa, and fintech as a means of financial inclusion is also one of Egypt’s strengths. A regulatory push from the CBE on topics like open banking or digital KYC could allow the sector to grow even further.

Mihretu ascended to the governorship of the National Bank of Ethiopia (NBE) with accolades for being progressive and reform minded. On this, he did not disappoint. In July, NBE made history with the launch of a new monetary policy regime that will be interest-rate based. In taking decisive action, the bank discarded the previous credit ceiling policy that had been criticized, including by the International Monetary Fund (IMF). The new regime, which aligns with global best practices, will be known as the National Bank Rate (NBR) and debuted at 15%. NBE reckons it will effectively anchor inflation and interbank forex trading and influence broader monetary and credit conditions. The new policy was one of the IMF’s conditions for a $3.4 billion bailout. Another was moving to a market-determined exchange rate. The new regime comes as Ethiopia grapples with the challenge of containing high inflation that fell to 17.2% in August, from 18.6% the prior month. The Birr is also under pressure after losing 5% value on the official market and 16% on the parallel market over the past year. In the banking industry, NBE is moving to tackle vulnerability through recapitalization. State-owned Commercial Bank of Ethiopia, heavily exposed to struggling state-owned enterprises, is among the first to recapitalize. 

The Central Bank of The Gambia (CBG) under Governor Saidy has been on an unwavering mission to bring down inflation, a key risk to economic growth. For this reason, the bank has maintained its policy rate at 17% since September of last year. This followed a cumulative 700 bps increase since March 2022. The tight monetary policy stance, which has seen the Gambia rank among the 10 African countries with the highest interest rates, has mixed effects. Inflation declined to 9.7% in July from 16.2% in January. The CBG projects a decline close to its target by the end of the year. The Dalasi is now stable after depreciating by 6.9% in the first quarter, while reserves amounting to $452.7 million in July are adequate. The moderating macroeconomic fundamentals are raising optimism in The Gambia’s economic prospects. CBG forecasts 5.7% GDP growth in 2024, a 0.2 percentage point upward revision from the May 2024 forecast. On the flipside, the tight stance has sent interest rates spiraling upwards. The effect has been a decline in credit to the private sector to 0.7% in June from 19.3% in March. The rates have also instigated a sharp rise in NPLs to 10.2% from 8.7% over the same period and 3.3% in the last quarter of 2023. Global shocks, regional conflicts and climate risks also pose threats to growth.

Addison, the Bank of Ghana (BoG) governor, has been on the lookout for the light at the end of the tunnel. Yet, no sign of light remains after two years of acute economic and financial pressures. Granted, the economic malaise is easing. A $3 billion IMF bailout and a deal with bondholders to restructure $13 billion worth of international debt has brought some relief and ignited an economic rebound. A key pointer is first quarter GDP growth of 4.7% compared to 3.1% last year. Though prospects point north, continuous stubborn inflation has forced the BoG to maintain a restrictive monetary policy stance. In January, the bank reduced its benchmark rate 100 bps to 29% and has held it unchanged in subsequent meetings. The impact has been a steady decline in inflation to 20.4% in August from 25% in April: well above the BoG’s target band of 6% to 10%. The central bank targets a rate of 15% by year-end. The Ghana Cedi is another source of headaches. The local currency has maintained a losing streak, depreciating by 19.6% over the seven months to July. Last year, it lost 22.1% value over the same period. While the economy is a mixed bag of fortunes, on the political front, the temperature is rising. In December, Ghana will head to the polls to elect a new president to succeed Nana Akufo-Addo. Though renowned for democracy and political stability, accusations of plans by the ruling party to rig the elections are sending shockwaves.

After decades of wars and crises, the Central Bank of Iraq (CBI) governor has much on his plate. One of the top priorities is economic diversification. Oil makes up 95% of government revenues, and global hydrocarbon prices influence the economy. In 2023, Iraq experienced a 2,9% recession, mainly due to OPEC+ production cuts, but growth is expected to pick up to around 4% this year. Governor al-Allaq is trying to push the non-oil economy through lending mechanisms for sectors like agriculture and industry. Another critical challenge is modernizing Iraq’s financial sector. In 2023, the CBI and the government introduced reforms to update the banking system, encouraging lenders to offer customers a broader range of services instead of focusing on imports and financing foreign trade. Restoring investor confidence is also a key focus. The banking system has been under international scrutiny due to reports of US-sanctioned entities accessing dollars through Iraqi lenders. Since 2022, 32 Iraqi banks have been banned from dealing in USD. Restrictions on foreign currency withdrawal and use have also been implemented. These measures have helped narrow the gap between the official and black-market exchange rates, but many loopholes remain. Tightened monetary policy, including a hike in the policy rate from 4% to 7.5% in June 2023, where it has remained, has also helped ease inflation, which nevertheless rose to 3.6% in June from 3.4% the previous month. Finally, global warming is a significant threat to Iraq’s economy and future.

Despite regional challenges due to the war in Gaza, Jordan’s economy is growing steadily. In 2023, GDP expanded by 2.6% and is expected to reach 3% in 2025. The current account deficit fell to 3.7% of GDP in 2023 from 7.8% in 2022. The IMF’s Extended Fund Facility, which began in January 2024, “is off to a strong start,” says the Washington-based institution, thanks to “sound macro-economic policies and structural reforms over the past few years.” The Jordanian dinar is pegged to the US dollar, and the Central Bank of Jordon (CBJ) cut its benchmark interest rate 50 basis points in September, in line with the Federal Reserve’s rate cut: the CBB’s first reduction since March 2022. Governor Al-Sharkas has kept inflation in check, with price increases falling to 1.9% in August. In October 2023, the Financial Action Task Force (FATF) removed Jordan from its Grey list, boosting investor confidence and acknowledging the CBJ’s efforts to combat money laundering and terrorism financing. “We will continue to effectively address emerging issues,” Al-Sharkas told the local press. The Jordanian banking system remains strong, profitable and resilient to external shocks. Last year, deposits increased by 34.5%, and credit facilities improved by 2.7%. In March, the CBJ unveiled its National Financial Inclusion Strategy 2028, which aims to foster sustainable growth, enhance public-private collaboration, and modernize the banking sector. The CBJ plans to increase financial inclusion to 65% from 43% and boost account ownership among small and medium businesses to 75% from 52%. Overall, Jordan’s economy is sound, but unemployment, over-reliance on foreign aid, and climate change remain important challenges.

Towards the end of last year and the beginning of this year, the Kenyan shilling was on an unprecedented freefall. In months, the local currency had moved from trading at KSh128 per dollar to about KSh170. Owing to the forex chaos and with Kenyans baying for his blood, Thugge found himself in a cage. The Central Bank of Kenya (CBK) governor, a seasoned economist, opted to maintain a cool head. He quickly implemented drastic measures, cutting across tightening the benchmark rate, inter-bank market interventions, and partial buyback of a $2 billion Eurobond. The dosage immediately affected the shilling, which took a U-turn from the worst performing in Africa to the best performing after a 16% gain in the first quarter. Amidst February’s pandemonium, the CBK hiked its policy rate by 50 bps to 13%. In August, the bank lowered the rate to 12.75%, a move informed by forex stability and declining inflation within the target bracket. In July, inflation hit a near four-year low of 4.3%, down from 6.9% in January, and rose only slightly to 4.4% in August. Though CBK continues to discharge its mandates effectively, Thugge has raised concerns that civil unrest and protests ignited by tax hikes and IMF-backed structural reforms could impact growth, projected at 5.4% in 2024.

One of the wealthiest countries in the world, Kuwait derives 90% of its revenues from hydrocarbons. As a result of OPEC+ production cuts, GDP contracted 2.2% last year, but should output volumes and prices increase, so will GDP. While the GCC is transforming exceptionally, political gridlock paralyzes Kuwait’s reform agenda. In May, the emir dissolved Parliament and suspended parts of the constitution to push reforms, including new taxes, debt legislation, fiscal consolidation and measures to stimulate private sector growth. At the Central Bank of Kuwait (CBK), Governor Al-Haroon is navigating these troubled times cautiously. In September, the CBK reduced its key discount rate by 25 basis points to 4% in response to the Fed’s move, its first rate cut since 2020. Inflation accelerated from 2.84% to 3% in July after hitting its lowest level since 2020 the previous month. Banks, the backbone of Kuwait’s non-oil economy, remain profitable, well-capitalized, and are armed with strong liquidity buffers. “Prudent regulation and supervision by the CBK has helped maintain financial stability,” the IMF states in its latest report. As Kuwait’s economic diversification agenda gains traction, banks will play a central role in the transition. Kuwait is expected to be the next GCC country to implement open banking.

Wassim Mansouri stepped in as acting governor in late July 2023, making it too early for Global Finance to assess his performance. Lebanon officially defaulted on its sovereign debt in March 2020 and is grappling with one of the world’s worst financial crises. The local currency, pegged to the US dollar until 2019, has lost over 98% of its value and inflation hit a record 221% in 2023; since then, it has been in retreat, hitting a low of 35.4% in July on easing consumer prices. The benchmark interest rate has remained at 20% since May of last year. The Lebanese largely blame Banque Du Liban (BdL) for implementing a Ponzi scheme that precipitated the country’s collapse, with Lebanese banks losing at least $70 billion. Mansouri now faces the daunting task of overseeing paralyzed and decried financial institutions. The top priority is how to distribute the losses. The last few years, local lenders have imposed informal capital controls, drastically restricting clients’ operations and access to savings accounts.

Consequently, banks are widely perceived as having stolen the people’s money. Another critical challenge is rebuilding the banking sector—deciding which banks can be bailed out and which ones need to file for bankruptcy or consolidate. Lebanon desperately needs international help, but negotiations have stalled due to a lack of political will to implement reforms. In September, former governor Riad Salameh was arrested in Beirut on embezzlement charges. 

For Andrianarivelo, implementing a new monetary policy framework was among his top priorities when he took over as Banky Foiben’i Madagasikara (BFM) governor in February of last year. On his first anniversary, the BFM operationalized a new interest rate targeting regime. The new framework will clarify interest rate settings, money market interventions, policy transmissions, and communication. The new policy regime is already having the desired impacts. After holding its benchmark rate steady, BFM increased the rate by 50 bps in August to contain persistent inflationary pressures. In July, the inflation rate stood at 7.5%, a small rise from 7.1% in January. With the tightening policy, the apex bank hopes to bring inflation down within the target band and stimulate more economic activities. Having recorded a 3.8% GDP growth in 2023, Madagascar is upbeat of a 4.5% expansion this year. However, ballooning public debt at over 60% of GDP, climate vulnerabilities, and slow growth of credit to the private sector could dampen growth. Though the banking sector remains stable, it has performed abysmally regarding financial inclusion. The banking penetration rate is currently at less than 30%, ranking the country among the lowest in sub-Saharan Africa.

In June, Mauritanian President Mohamed Ould Ghazouani secured another term after winning the presidential election with 56.12% of the vote. Being in a volatile region where the tide of jihadism has been spreading fast, the largely peaceful election was a plus for Mauritania. The election coincided with a period of macroeconomic stability. The events have translated into calm waters for the Central Bank of Mauritania (BCM). Inflation decreased sharply to 2.7% in May from 6.1% in the same month last year. The local currency, the Ouguiya, has continued to hold firm. While the stability has provided BCM with enough headroom for monetary policy easing, BCM has maintained its key rate at 8% since December 2022. Mauritania is buoyant, and its economy should maintain a growth trajectory in the current environment. This year, GDP growth is forecast to reach 4.3% from 3.4% last year. Non-extractive sectors, mainly agriculture and fisheries, are expected to drive growth. The country will, however, have to wait much longer for petrodollars following delays in the first gas from the Tortue project. To enhance stability in the banking sector, BCM has increased the minimum capital requirement for banks to $50.4 million and the core capital requirement to at least $75.7 million.

Seegolam has been the central player in Mauritius’ quest to become a credible and dependable international financial center since his appointment as governor in 2020. In July, the Bank of Mauritius (BoM) governor was accorded more responsibilities following his appointment as Financial Services Commission chairman. He will also be responsible for regulating the non-bank financial market. Undoubtedly, Seegolam has done a splendid job in regulating the banking industry. Today, Mauritius boasts of an industry that is not only vibrant but also resilient, with sound asset quality, liquidity buffers and a key driver of economic growth. With the new role and considering BoM’s ownership of Mauritius Investment Corporation, the country’s financial services sector is now under his grip. Even as he assumes the added duties, Seegolam has been keen to ensure the BoM remains steadfast on its critical monetary mandates. For nearly two years, the bank opted for an accommodative monetary policy stance, maintaining its key rate at 4.5%; in September, following the Fed’s rate cut, it reduced its benchmark interest rate 50 basis points to 4%. The prolonged policy stance is informed by the need to balance economic growth risks and inflation outlook. BoM has already managed to contain inflation to within the target band following a steady drop to 2.2% in June 2024 from 7.9% in the same period last year, although inflation moved back up to 2.7% in August.

Despite multiple shocks, Morocco’s economy is holding firm. In 2023, GDP grew by 3.2%, up from 1.5% in 2022. This year, performance should be slower due to weaker agricultural output. Nonetheless, years of structural reforms and careful economic planning are yielding strong results. Last year, Morocco stood out on global investors’ maps with over $20 billion announced greenfield FDIs, up from $3.8 billion in 2021. This shows the country has become an attractive business destination and opens opportunities for the future. Over the years, Bank Al-Maghrib (BAM), the central bank, has demonstrated a long-term, sustainable vision for Morocco’s financial sector without deviating from its mission to control price stability. After keeping interest rates low throughout COVID, Governor Jouahri hiked the main policy rate to 3% in February 2023. In the following months, inflation declined faster than in neighboring countries. The governor then lowered the policy rate by 25 bps to 2.75% in June of this year and expects inflation to drop to 1.5% by the end of the year; it stood at 1.7% in August. Moroccan banks are robust, with total assets representing 138% of GDP. They are also among the continent’s top financial institutions, increasingly scaling across different countries, especially in Africa. Regarding fintech and innovation, Morocco still lags behind Arab and African peers. The BAM, however, is forward-looking regarding climate change and how to translate this new reality into monetary policies.

Zandamela falls in the rank of governors reveling in a smooth sail in 2024. For the Bank of Mozambique (BoM) governor, it has been a year of easing the monetary policy. Throughout 2023, BoM left its MIMO interest rate unchanged at 17.25%. This year, the consolidation of inflation at single digits has set the apex bank on a path of cuts. In July, BoM cut the rate to 14.25% from 15%, bringing borrowing costs to their lowest level since 2002, according to Trading Economics. With inflation on a downward spiral, hitting 2.75% in August, the bank has signaled the cuts are bound to continue. IMF has lauded the easing as appropriate. However, the Bretton Woods institution wants improved transmission by deepening the interbank, money, and foreign exchange markets. This is critical in ensuring Mozambique’s economy remains on a solid footing. This year, growth is projected at 4.3% compared to 5% in 2023, driven partially by a liquefied natural gas bonanza. The government has moved to ensure transparency and sound management of the new-found wealth with regulations to govern the Sovereign Wealth Fund that will be domiciled at BoM.

The Bank of Namibia (BoN) has often depended on signals from the South Africa Reserve Bank (SARB) when deciding on its monetary policy repo rate. This emanates from the fact that the Namibia dollar is pegged to the South African Rand; Governor !Gawaxab has likened the one-to-one peg to a marriage. In August, the BoN decided a split was necessary. The bank reduced its benchmark rate to 7.50% from 7.75%; the rate has remained unchanged since June 2023. The decision came just a month after the SARB had elected to keep its repo rate unchanged at 8.25%. For Namibia, the moderating inflation meant policy easing was warranted to bolster the economy. Inflation stood at 4.6% in July, the same level as in June, but eased down to 4.4% in August. BoN forecast the rate to average 4.7% this year. The need to spur economic activity is critical. Growth has slowed due to the impacts of a severe drought, the worst in a century. Half of the population is facing starvation, forcing the government to take desperate measures. In late August, it announced plans to kill more than 700 wild animals to feed people. Apart from drought, sluggish performance of key sectors, particularly mining and a soon-maturing $750 million Eurobond, are adding to the economic pains. BoN has reduced its GDP forecast for 2024 by 0.6 percentage points to 3.1%.

It has been a year of pragmatism and boldness for Cardoso. The Central Bank of Nigeria (CBN) governor is walking the talk on his promise to return to orthodox policies. Cardoso was appointed in September of last year to clean up the CBN’s deep problems caused by his predecessor, Godwin Emefiele. A former Citigroup executive, Cardoso has not disappointed. One area stands out –steadfastness in using orthodox monetary policy tools to reign in stubborn inflation. In September, the CBN raised its main lending rate 50 basis points to 27.25%, the fifth consecutive increase this year. During this period, the rate has been hiked 850 bps from 18.75%. The CBN reckons aggressive tightening is necessary. Inflation remains persistently elevated, hitting a 28-year high of 33.4% in July, up 3.5 percentage points from January, although it eased to 32.15% in August. For its part, the Naira has been oscillating in and out of murky waters despite measures to tackle forex market distortions. Stabilizing the macro fundamentals is critical in realizing a 3.3% GDP growth in 2024, compared to 2.9% last year. The CBN has also been busy in the financial sector. Despite the industry being stable, asset quality is deteriorating, prompting the bank to take action, revoking the licenses of 132 insolvent microfinance banks last year.

In 2023, Oman’s economy grew by 1.6%, down from 9.6% the previous year, a drop mainly due to OPEC+ oil production cuts. The country is implementing subsidy cuts, new taxes, and privatization reforms to reduce reliance on hydrocarbon revenues. The authorities plan to list around 30 state-owned companies over the next five years. Oman is also reorganizing the management of public assets by creating mega entities including the Oman Investment Authority to increase efficiency. At the Central Bank of Oman (CBO), Executive President Al-Amri’s main task is supervising local banks and maintaining price stability during this transition. The CBO lowered its key repo rate for local banks by 50 basis points to 5.5% in September, on the heels of the Fed’s similar cut. In August, the annual inflation rate dropped to 1.1%.

“The CBO is generally an early adopter of international regulations. It has a sound record of taking proactive and corrective actions to reduce banks’ vulnerability to financial crises. Omani banks also benefit from a stable core deposit base, with limited reliance on external funding,” S&P says. While Omani lenders are modest in size compared to GCC peers, overall, the banking sector is sound. On the innovation side, Oman joined the GCC central banks’ Afaq payment system to facilitate real-time transactions in local currencies. The CBO also licensed its first international fintech (Paymob), paving the way for other companies to step in.

Qatar’s economy is stabilizing after the 2022 FIFA World Cup frenzy. Growth stood at a modest 1.3% in 2023, but Doha’s future remains bright, with the North Field Expansion Project expected to more than double the emirate’s liquified natural gas (LNG) production by 2030. Qatari banks are well-capitalized and some of the largest in the MENA region. In late 2023, Qatar launched its third National Development Strategy to further modernize the financial sector. Governor Al-Thani, who also chairs the Qatar Investment Authority—the country’s $450 billion sovereign wealth fund – spearheads initiatives to improve financial markets, promote innovation and develop the insurance sector. His core mission remains price stability. Like most GCC currencies, the Qatari riyal is pegged to the US dollar and the Qatar Central Bank’s (QCB) monetary policy moves in sync with the Fed’s. In September, the QCB followed the Fed’s lead in lowering its lending rate 55 basis points to 5.7%. Inflation has eased dramatically this year, dropping to 0.22% in August, down from 2.7% in February. “Continued prudence in macroeconomic and financial sector policies will further strengthen Qatar’s resilience amid elevated global uncertainty and geopolitical tensions,” comments the IMF in its latest country assessment. Over the years, the QCB has adapted its regulatory frameworks to welcome digital innovation. In June, it announced a new central bank digital currency project based on artificial intelligence and distributed ledger technology aimed at settling large payments with local and international partners.

Rwangombwa holds the distinction of being the longest-serving governor in Africa. For the 11 years he has been at the helm, the National Bank of Rwanda (BNR) governor has been instrumental in the bank’s transformation. During the commemoration of the BNR’s 60th anniversary in June, Rwangombwa was assertive that the bank is today fit for purpose and following best global practices on monetary policy trends. This fact has been at play this year. After a period of tightening last year, the BNR has responded to a stable trend in inflation with monetary policy easing. The bank cut its benchmark rate by 50 bps to 6.5% in August; it was the second consecutive reduction following a similar move in May. In August, the annual inflation rate was at 1.7%, according to Trading Economics, despite higher consumer prices: well anchored within the target range and expected to remain stable in the medium term. Though under pressure, the depreciation of the Rwandan franc has been moderate. The declining interest rates are sparking growth in credit to the private sector, a critical development in sustaining stellar GDP expansion. In the first quarter, the economy expanded by 9.7%.

Last year, Saudi Arabia hit a 0.8% recession due to OPEC+ oil production cuts. Non-oil GDP grew by 3.8%, indicating that the kingdom’s Vision 2030 blueprint to diversify away from oil rent is starting to show results. As the Arab world’s largest economy transforms at an unprecedented pace, Ayman Al-Sayari, who took office as governor in February 2023, oversees price stability and spearheads modernization of the financial sector. In September, the Saudi Arabian Monetary Agency (SAMA), the central bank, dropped its repo rate 50 basis points to 5.5% following the Fed’s similar cut. Last year, inflation stood at 2.3%; it has retreated under 2% this year, registering 1.6% in August.

Following a wave of consolidation, Saudi banks have emerged as some of the largest and fastest-growing in the MENA region. In 2023, the total assets of Saudi finance companies increased by 13%, the SAMA reports. While the riyal’s peg limits the governor’s action on monetary policy to the US dollar, Al-Sayari took measures to stabilize liquidity expansion and better manage public deposits with commercial banks through an auction-based mechanism. The governor also supervises the kingdom’s financial innovation goals and the entry of foreign players into the Saudi market. Saudi Arabia aims to attract 500 fintechs, creating 18,000 jobs by 2030 as part of its ambition to become a digital hub. So far, around 200 financial tech firms have generated some 5,000 jobs, according to the authorities. The Saudi Arabian Monetary Agency has its own Innovation Hub to channel this momentum, which looks at technologies like a distributed ledger or artificial intelligence, a regulatory sandbox, and an Open Banking Lab. It is constantly upgrading regulatory frameworks to accommodate new products and services. 

In November, Kganyago will begin a new five-year term as governor of the South African Reserve Bank (SARB); he was reappointed to the position he has held since 2014 primarily to “ensure continuity and institutional stability.” Kganyago has proved a steady hand in steering the SARB even in tough times. Today, South Africa’s economy remains in the doldrums. Despite a renewed sense of optimism following the formation of the Government of National Unity, the country faces an uncertain future. In the first quarter, the economy contracted by 0.1%. In 2024, South Africa would be lucky to attain its projected 1.2% GDP growth rate; the SARB has been explicit that economic performance is “disappointing.” Though most contributing factors are beyond its reach, the apex bank effectively discharges its mandates to stimulate the economy. After holding its key interest rate at 8.25% since May of last year, the SARB lowered it 25 basis points in September: its first easing since the 2020 Covid pandemic, according to Trading Economics. With inflation steadily declining, hitting 4.4% in August, additional rate cuts could be in the offing. As part of modernizing the financial sector, the SARB has released a digital payments roadmap. The goal is to remove obstacles, increase accessibility and usability and unlock the full potential of digital payments.

Tutuba, the Bank of Tanzania (BoT) governor, enjoyed a prolonged honeymoon in his first year in office. This year, however, the ballgame has been different, with battles on many fronts. Some of these have been with politicians pushing for removing the tenure limits for commercial bank chief executives. Currently, the limit is 10 years. Tutuba resisted the push. BoT has also faced criticism over awarding a banknote reprint tender, with Tutuba being forced to defend the process. These battles have shaken his grip on the apex bank at a time when the BoT is hoping for effective implementation and transmission of its interest rate-based policy framework, which came into effect at the beginning of the year. With the new regime, the BoT intends to influence economic conditions more precisely. Having set the benchmark policy rate at 5.5% in January, BoT hiked it to 6% in April and left it unchanged in September. Transmission is proving effective with inflation contained below the 5% target; in July, the inflation rate stood at 3.1%. With the shilling showing signs of holding stable after falling 11.2% year-on-year by the end of April, adequate reserves and a narrowing current account, Tanzania is buoyant with stellar growth. GDP is projected to expand by 5.4% in 2024.

Tunisia is navigating a severe economic and financial crisis. In 2023, GDP growth was a mere 0.4%, inflation rose to 9.3%, and unemployment rose to 16.4%. President Kais Saied appointed Fethi Zouhair Nouri as governor of the Central Bank of Tunisia (BCT) in February 2024, shortly after negotiations for an IMF loan failed and the government took a controversial decision to request $2.2 billion in interest-free loan from the regulator to pay off the country’s foreign debt. This is the first time the BCT has filled the public budget deficit. Although Tunisia avoided default in 2023, observers argue that meeting this year’s financial obligations will prove even harder, as the country needs to secure another $4 billion. The benchmark interest rate hit 8% early last year and has since remained at that level; the BCT decided to keep it there in July. Inflation has been dropping steadily since last year, declining to 6.7% in August. An economics professor, Nouri has been a BCT board member since 2016. It is too early for Global Finance to review his policies, but challenges ahead are plenty, in particular the central bank’s ability to maintain its independence.

In recent months, the Bank of Uganda (BoU) has focused on streamlining the financial sector. Having issued stringent new paid-up capital requirements for banks in November 2022, BoU has been on a housecleaning mission to enhance stability. Most of the country’s 25 banks have complied with $40.3 million paid-up capital for Tier 1 banks and $6.7 million for Tier 2 lenders. One bank, however, has been closed, while three Tier 1 lenders have been downgraded. The BoU reckons the housecleaning was necessary for a sector grappling with low credit growth and high NPLs. The upside risk of inflation forced BoU into a tightening monetary stance early in the year before resorting to easing. In August, Deputy Governor Atingi-Ego cut the bank’s benchmark rate by 25 bps to 10% as inflation moderated. That month, the inflation rate dropped to 3.5% from 4%, and the BoU expects it to stay below 5% in the coming months. PwC, one of the world’s Big Four accounting firms, reports that Uganda is among the fastest-growing economies in Africa; GDP growth is projected at 6% this year and could hit 7% in the medium term, driven by increased oil and gas industry investments and rising agricultural exports.

The United Arab Emirates (UAE) is experiencing solid GDP growth, expected to register at 4% in 2024. One of the world’s top oil exporters, the UAE was the first GCC country to diversify its economy; today, non-oil sectors account for over 70% of GDP. Since 1997, the dirham has been pegged to the dollar and the Central Bank of the UAE’s (CBUAE) monetary policy moves in tandem with the Federal Reserve’s; in September it followed the Fed’s lead, cutting the rate on its overnight deposit facility by 50 bps to 5.4%. Inflation declined sharply in July to 3.32% from 3.85% the previous month. Already some of the biggest in the MENA region, Emirati banks continue to thrive with projects at home and a broad customer base of global high-net-worth individuals. Often described as a fiscal haven, the UAE was removed from the Financial Action Task Force’s grey list in February, highlighting the authorities’ efforts to combat financial crime. The CBUAE also regulates hundreds of financial firms including some of the world’s top banks that have set up shop in Dubai and Abu Dhabi. A regional fintech leader, the UAE continues to embrace new technologies under close CBUAE supervision. These last few months, the central bank introduced new regulations on “payment token services”: essentially setting a roadmap for crypto where Dirham-based coins are preferred over foreign instruments like Bitcoin. It also launched a framework that “established global standards for open finance” and “empowers consumers to obtain the best financial solutions,” Governor Balama told the local media.

Kalyalya is facing his biggest test as governor of the Bank of Zambia (BoZ). A local currency that has lost significant value and continues downward, along with inflation moving further away from targets, is adding to the pain of an unrelenting economic crisis in Zambia. The freefall of the Kwacha is of particular concern. Over the past five years, it has lost half its value against the dollar. In the first quarter of this year, it depreciated by 10.6% before moderating at 3.8% in the second quarter. In the third quarter, it weakened by 6%.

The nosedive is forcing businesses to discard the kwacha, preferring the dollar. Fears of dollarization of the economy have forced the BoZ  to defend the Kwacha as the main medium of exchange. But the bank’s inability to arrest the currency’s freefall is just one of Kalyalya’s headaches. The other is inflation, which rose 15.5% in August. Moving further from the target band, inflation has seen the BoZ maintain a tight monetary policy. In May, the bank hiked its policy rate by 100 bps to 13.5%, the highest since 2017, keeping it unchanged in August. For Zambia, which is grappling with a severe drought and remains in a debt crisis, the challenging macro fundamentals intensify the pains of a battered economy. Growth projections for 2024 have been revised downwards to 2.3% from 4.7%.

Soon after being appointed Reserve Bank of Zimbabwe (RBZ) governor in March, Mushayavanhu made a candid admission – the market had lost confidence and trust in the credibility of the RBZ. Therefore, continuing with business as usual didn’t make sense. A former banking executive, Mushayavanhu is making bold moves to regain the central bank’s credibility. In April, one major decision was to introduce a new currency, the Zimbabwe gold (ZiG), replacing the worthless local dollar. The ZiG ended a bout of forex havoc that saw the Zimbabwean dollar depreciate by 260% in the first quarter. The Reserve Bank of Zimbabwe  (RBZ) also scrapped the issuance of gold coins his predecessor, John Mangudya, introduced. Another action was the recalibration of the monetary policy framework. In April, the bank slashed the benchmark rate to a still-high 20% from 130%, and has held it at that level since then. The tight policy stance and the gold-backed ZiG have turned the tide on inflation; in July, the new currency’s month-on-month inflation rate was -0.1%. To ensure sustained stability, the RBZ is stockpiling gold. In Mushayavanhu’s first 100 days in office, the bank increased its bullion reserves by 30%, hitting $370 million.

Mushayavanhu is already earning the trust of the market. However, the jury is still out on whether the Reserve Bank, which is prone to interference, will enjoy full autonomy under his watch. Notably, he has been a close business associate and friend of President Emmerson Mnangagwa and has links with the ruling Zanu-PF party.

Global Finance: What is your outlook for Madagascar’s economy over the next 12 months, and the main risks to growth?

Aivo Andrianarivelo: Madagascar’s economic outlook is generally positive. Growth is projected at 4.5% and 5% in 2024 and 2025, respectively, with the tourism, agriculture and telecommunications sectors being the main drivers. Improvement in the investment climate should also stimulate private investments. Overall, the macroeconomic fundamentals project optimism. Inflation is in the single digits and should average 8% this year. On foreign trade, falling prices of nickel and cobalt could impact earnings but should be offset by the increase in tourism receipts and revenue flows under private services. Foreign direct investment [FDI] should also consolidate, driven by the textile and mining sectors.

The government has also put in place measures to strengthen revenue mobilization and optimize expenditures. The move, coupled by budgetary support expected from development partners and temporary advances from BFM, is essential in regenerating liquidity in the economy and stimulating economic activities. Annual growth in money supply is thus estimated at around 12% at the end of 2024.

Despite the positive outlook, there are several risks, the top one being climate shocks. Madagascar remains vulnerable to cyclones, droughts and floods that can cause significant damage. Another risk is price fluctuations of agricultural exports such as vanilla and cloves. A global economic slowdown, particularly among our main trading partners, also has the potential to reduce demand for exports and curb FDI. The volatility of world prices that could trigger surges in the prices of energy and basic food products, particularly rice prices, could worsen Madagascar’s trade balance and cause additional inflationary pressures.

GF: BFM has implemented an operational monetary policy framework. What is the progress, and what has been the impact?

Andrianarivelo: BFM started using the new framework on February 7, 2024. It has four main characteristics. The first is the use of monetary policy instruments on money market interventions, thus guaranteeing stability. The second is adopting a methodology for calculating interest rates, namely the weighted average rates calculated on a daily basis for interbank loans with one day of maturity and without guarantee. The operational target constitutes the market reference rate and is published daily by BFM. The other characteristics are improving the monetary policy forecasting and formulation system in order to pursue a more forward-looking monetary policy and improve BFM’s communication with the public.

Since the implementation of the new framework, BFM has succeeded in achieving stability around its operational objective, ensuring a clear transmission of its decisions in terms of short-term interest rates on the money market. We understand that transmission on the rates of other market segments and on the medium- and long-term rates still needs to be improved.

GF: BFM has contained inflation at a single-digit rate. Are there any plans for monetary policy easing?

Andrianarivelo: Inflation has certainly slowed significantly compared with last year, but its current level remains high. Furthermore, inflation is persistent, having recorded only very slight variation since the start of the year. In our August meeting, the Monetary Committee opted for an increase in rates, signifying a tightening of policy after a year of status quo. We estimated that current monetary conditions, which are already in a tightening zone, are still insufficient to bring inflation back to its medium-term target. The disinflation process in Madagascar is considered fragile. New shocks could plunge the country back into an inflationary spiral. For the moment, we are very cautious about the prospects for monetary policy easing.

GF: Is BFM concerned about a decline in bank loans and the knock-on effects on the economy?Andrianarivelo: The banking sector plays a crucial role in the country’s economy, contributing 27.6% in terms of assets. Activity in the sector demonstrates its good solidity and capacity for resilience despite the context of crises that have plagued the country in recent years. Indeed, all banks have sound capital adequacy. Though the rate of growth of activity is lower compared to the previous year, profitability continues to flourish as reflected by the good level of return on assets of 3.6% and return on equity of 34.9%.

Global Finance: What is the economic outlook for Kenya in the next 12 months, and what would you say are the main risks?

Kamau Thugge: The Kenyan economy registered strong growth of 5.6% in 2023 compared with a revised growth rate of 4.9% in 2022. The impressive performance was driven by a robust rebound in the agriculture sector after two years of consecutive droughts in 2021 and 2022. The services sector also remained resilient, supported by growth in tourism, real estate, and financial and ICT services.

In the first quarter of this year, the economy has continued to project resilience, expanding by 5% compared with 5.5% in a similar quarter of last year. Agriculture and the service sector continue to anchor growth. However, the performance of other key sectors, like manufacturing and construction, has remained subdued. That said, the Kenyan government is implementing measures to boost economic activity, which should translate to growth of 5.4% in 2024 and 5.5% in 2025.

Though growth remains strong, we are alert to risks, the main of which is the global environment. Interest rates in advanced economies are expected to remain higher-for-even-longer due to the persistence of inflation above target, increased policy uncertainty following changes of government in some major economies, trade tensions and continued geopolitical tensions.

GF: Kenya has been praised for avoiding a default on the $2 billion eurobond. How critical was this for the country?

Thugge: Concerns over the ability of the country to refinance the eurobond was a source of uncertainty in the foreign exchange market, and partly contributed to the sharp depreciation of the shilling from 2023 to early 2024. The external debt refinancing following the liability management operation and subsequent repayment of the remainder of the eurobond in June completely changed investor sentiment. This, coupled with monetary policy actions, led to resumption of net forex inflows into the Kenyan economy. The change in sentiment and improved foreign investor confidence immediately impacted the shilling, which is currently 17% stronger against the US dollar relative to the level at the beginning of the year.

GF: Kenya has managed to stabilize its currency while inflation remains within targets. Has the country weathered the storm?

Thugge: The CBK’s monetary policy measures, coupled with the reforms to strengthen the monetary policy framework and improve operations of the foreign exchange market, have had the desired impact in restoring macroeconomic stability. The measures have addressed the pressures in the exchange rate, lowered inflation and ensured that inflation expectations are well anchored.

The stability of the shilling reflects the impact of the tightening of monetary policy by raising the central bank rate cumulatively by [575] basis points since May 2022, thereby narrowing the interest rate differentials between advanced economies and Kenya. The tightening of monetary policy has also minimized portfolio outflows and supported exchange-rate stability. Other factors that have impacted the shilling include improved sentiment following the successful refinancing and eventual repayment of the eurobond; increase in offshore investments, especially in the domestic bond market; and inflows from exports and diaspora remittances. 

The measures we have taken have also impacted inflation, which has eased from a peak of 9.6% in October 2022 to 4.3% in July this year. Though inflation expectations are fairly well anchored, CBK remains alert to attendant risks and stands ready to take further actions to support its price stability objective, given the evolving global and domestic economic environments.

GF: How stable is the banking sector, and is CBK concerned over rising non-performing loans?

Thugge: Kenya’s banking sector remains sound and stable. The sector’s total capital adequacy ratio stood at 18.6% in December 2023—above the minimum ratio of 14.5%. The liquidity ratio, at around 51%, remains well above the statutory minimum level of 20%. Total net assets registered a notable increase of 16.7%, from $51 billion in December 2022 to $60 billion in December 2023. Customer deposits increased by 18%, from $38.6 billion in December 2022 to $45.6 billion in December 2023. The sector continues to expand its footprint domestically and in the Eastern African region and beyond. The growth of Kenyan banks has leveraged on adoption of emerging innovations and technology. While the ratio of gross non-performing loans [NPLs] to gross loans stood at 16.1% in April 2024 compared with 15.5% in February, banks have continued to make adequate provisions.

Elections in Africa are often contentious and disruptive to the socioeconomic order. Mauritius has evaded this rocky path and remains a beacon of democracy, hoping to maintain that pattern ahead of general elections on November 30. But growing discontent has the small island nation east of Madagascar on edge.

In 2022, large numbers of people living in low-income neighborhoods took to the streets over high fuel prices. Since then, the capital, Port Louis, and other major cities have been rocked by protests over unemployment, the cost of living, corruption, and the mishandling of an oil spill off the country’s coast.

Mauritius is going to the polls just as the economy is losing steam after years of sustained GDP growth. In 2023, GDP expanded 7%; it is forecast to grow more slowly at 6.5% this year before moderating to 4.9% in the medium term. Dissatisfaction is deepening among the population of 1.3 million, many of whom now feel the country is heading in the wrong direction.

That makes the 2024 elections a referendum on incumbent Prime Minister Pravind Kumar Jugnauth as he seeks a new five-year term.

“Mauritius is at a crossroads economically—and perhaps, even politically,” says Pritish Behuria, associate professor at the University of Manchester’s Global Development Institute, as infighting among political parties and lack of a clear governing plan will create an even rougher road for the winning party.

BMI Research reckons that owing to a split within the opposition coalition, Jugnauth’s ruling Militant Socialist Movement (MSM) party could sail to victory. If MSM prevails, it will be charged with bringing further diversification to an economy that has evolved from dependence on sugar, fisheries, tourism, textiles and apparel to, currently, financial services.

The growth slump comes as the government struggles with multiple social challenges, including an aging population—pensioners constitute over 20% of the population—a moderately high unemployment rate of 6.1% and widening income inequality.

The pension burden weighs heavily on the public coffers and is bound to worsen following the government’s move, in its 2024-2025 budget, to pacify retirees by doubling monthly payments to $346 for those above 65 and $380 for those above 75. Exacerbating the drain on the treasury is a public debt that remains high at 74.5% of GDP, despite declining from 80.2% a year ago.

“Mauritius’ economy is under strain and new strategies for sustainable development are needed,” argues Adam Moolna, lecturer in Environment and Sustainability at UK’s Keele University.

The government acknowledges the need for economic diversification. However, the country lacks the headroom to mobilize the massive resources required to open new frontiers of growth, such as in maritime and renewable energy. Among other items, $6.5 billion, a large sum for the country, is required for energy transition.

Given limited resources, the government is opting for pragmatism. In his budget speech, Renganaden Padayachy, minister of Finance, Economic Planning and Development, said its immediate focus, should it remain in office, will be increasing the productivity of sectors that currently form the island’s pillars of economic prosperity.

Case in point is manufacturing. Over the past two years, the sector has posted doubt-digit growth, expanding by 10.4% in 2022 and 12.9% in 2023. With the value of exports currently at $2.1 billion, the Jugnauth government’s target is to increase exports to $3.2 billion annually.

Financial services pose a more doubtful prospect after posting muted growth of 4.4% last year. For a country that harbors ambitions to build a vibrant international financial center, this falls far below its goals and has prompted calls to recalibrate. In March of this year, a new law went into effect designed to bolster the nation’s image as a jurisdiction committed to rigorously combating financial crimes.

Touted as one of the most ambitious legal reforms in recent years, the new law establishes a Financial Crime Commission (FCC) whose responsibilities will be detecting, investigating and prosecuting financial crimes.

“The law demonstrates commitment to maintaining a transparent, secure and compliant financial environment,” says Devalingum Gopalla, a partner at global law firm Dentons. Mauritius was removed from the Financial Action Task Force gray list in 2021 after addressing deficiencies in its anti-money laundering and counter-terrorism financing framework, Gopalla notes, and the FCC will be instrumental in enhancing the country’s financial integrity and restoring investor confidence.

Attracting foreign direct investment remains paramount in propelling growth. Last year, the country reached an investment rate of 23.5% on inflows of $800 million, amounting to 5.7% of GDP. This year, Padayachy said, the government is targeting an investment rate of 25% and inflows of $865 million.

“Mauritius has proved to be an ideal jurisdiction for businesses aiming to innovate, scale and remain competitive in a dynamic global economy,” says Gopalla,  who is based in Mauritius. But ensuring continuing FDI inflows is particularly critical following the amendments in March to the 1982 Double Taxation Avoidance Agreement (DTAA) with India, which is a target for significant investment from the island and with which it shares a customs regime. The treaty has been instrumental in encouraging foreign companies to route investments to India via Mauritius; aimed at curbing tax evasion, the amendment would add anti-abuse provisions including a principal-purpose test that could, unfortunately, make Mauritius less attractive.

But having benefited significantly from the DTAA, Behuria contends, Mauritius must quickly find ways to reassert the supremacy of its offshore investment status.

“Mauritius now has the opportunity to remodel its offshore sector akin to more diversified centers like Dubai and Singapore,” he says. Grabbing this opportunity could spur the growth of the vibrant banking sector, which in recent years has been attracting growing numbers of high-net-worth individuals.

Henley & Partners’ “Africa Wealth Report 2024” finds that over the past decade, Mauritius has recorded the world’s highest growth in the number of dollar millionaires, at 87%, to 5,100. Over the next decade, Henley expects it to post a 95% growth rate, positioning it as one of the world’s fastest growing wealth markets.

Mauritius has enhanced its position in private banking through “careful planning and a strong commitment to creating an environment conducive to wealth management and growth,” says Marc-Alexandre Masnin, head of Investment Solutions at Mauritius-based AfrAsia Bank. “The island’s favorable tax regime stands out as a primary draw, with no capital gains tax, no inheritance tax and relatively low corporate and personal tax rates.”

Indeed, a favorable legal framework and rapid growth of the sector are sparking intense competition in the country’s private banking establishment, with signs of a shakeout. In July, HSBC exited its wealth, personal and business banking operations, disposing of the units to South Africa’s Absa Bank.

This, however, is a problem many developing countries would be happy to have. And despite the current economic slowdown, if it can maintain its reputation for stability in the global financial landscape, a bright future may be ahead, Masnin predicts, “Mauritius’ strategic location in the Africa-Asia corridor, coupled with its extensive network of double taxation treaties and investment agreements, provides unparalleled opportunities for cross-border investments.”

Now, a High Court decision declaring the 2023 Privatization Act unconstitutional has stopped the sales. The court cited lack of meaningful public participation and violation of Parliament’s oversight role in declaring the law null and void.

The move strikes a major blow to the government, which is struggling to raise revenues amid pressing obligations for debt repayment. Estimates by the Parliamentary Budget Office show that disposing of 48 out of 248 SOEs could raise between $466 million and $854 million in the medium term.

Some of the parastatals are laggards that depend on government revenues for funding and are draining already squeezed resources. 

Putting the brakes on the privatization push will leave a huge hole in government coffers, says Bob Karina, former chair of the Nairobi Securities Exchange. It also prolongs the listing drought on Kenya’s bourse; profitable SOEs were marked for sale through listing on the NSE.

“The government faces challenges in plugging the deficit while efforts to boost stock market activity have been shredded,” says Karina, who now chairs Faida Investment Bank.

Inability to sell non-strategic and non-performing entities also puts the Kenyan government at loggerheads with the International Monetary Fund. In June, the multinational lender included restructuring and privatization of the parastatals among conditions for Kenya to access $3.6 billion in financing.

The ruling on the Privatization Act echoes the fate that befell the 2023 Finance Act, which included provisions for tax hikes and other revenue-raisers and was pronounced unconstitutional by the Court of Appeal in August, although the High Court has suspended that ruling while the government appeals it. The decisions are complicating efforts to collect revenues, which have been further hobbled by popular protests.

For Kenya, realizing the government’s $23.2 billion revenue projection for the 2024-2025 fiscal year is proving herculean. Fifty-five percent of that figure is set to go toward public debt repayments. By June, the national debt stood at $82.2 billion.  

The government of new President Bassirou Diomaye Faye has set up a commission to audit Senegal’s natural resource agreements, with the aim of “reexamining and rebalancing” them to match the West African nation’s interests.

The move comes just weeks after Senegal officially became an oil producer. In June, Australian operator Woodside Energy announced the first oil extraction from Sangomar offshore field, a project in which it has invested $5.2 billion and controls an 82% share; state-owned Petrosen holds the remaining shares.

Woodside is one of numerous multinationals with natural resource interests in Senegal, the others being BP, Kosmos Energy, Total, Oranto, Endeavour, Managem, and Dangote. BP, operator of the $4.8 billion Greater Tortue Ahmeyim gas project, is on course to make its first delivery this year. Senegal is on the receiving end of an expected $1.4 billion petrodollar windfall annually.

For the multinationals, which hope to recoup their massive investments, the overall motive and endgame of the review remain a mystery and cause for worry. But in theory, it could enhance transparency and strengthen trust between the government, multinationals, and the public, notes Catherine Lena Kelly, associate professor of Justice and Rule of Law at the Africa Center for Strategic Studies in Washington.

“Senegalese people want tangible benefits from natural resources and demand efficient use of profits,” she says.

The government has said categorically that it has no plans to nationalize projects. But, coupled with the destabilizing effects of recent regime changes in Africa, the Senegalese audit will strengthen foreign companies’ resolve to tighten arbitration clauses in their contracts, says Kenya-based energy and mining expert Patrick Obath.

“Expect arbitration clauses to become watertight, because investors abhor the uncertainties of regime changes,” he says. Going by the experiences of other African governments that have recently ripped up existing agreements, like Tanzania, close observers caution that Senegal could be walking a dangerous path.