GCR takes three African banking hubs, from the South, East and West of the continent and provides an opinion on how the banking sectors will cope with this potential ‘annus horribilis’.
• We expect the Kenyan economy to outperform South Africa and Nigeria in 2020 and 2021, however, the banking sector has significant asset quality issues and could face significant stress in the lower tiers of the sector.
• The South African Banking system is the most stable, benefiting from lower credit losses and FX risks versus continental peers, but the economy is expected to be weak for some time.
• The Nigerian banking sector performance and economic recovery will be weak as they are both largely linked to the oil price and stability of the Naira.
The African continent is still hoping to avoid catching up with other regions, in regard to confirmed COVID-19 cases. Regardless, the direct and indirect impact of the pandemic, alongside the oil price crash and rising global trade and political tensions have already cast a long shadow on Africa’s 2020 outlook.