African banks account for 63% of the continent's total financial system assets, compared with 37% for the non-banking financial sector, according to the inaugural African Financial Stability Report, the first continent-wide assessment of financial system resilience.
Prepared under the leadership of the Central Bank of Egypt (CBE), the report covers 46 African countries, representing around 90% of Africa's GDP and 85% of the continent's economies.
The report showed that banking sector assets reached 80% of Africa's GDP, while non-bank financial institutions accounted for assets equivalent to 46% of GDP, underscoring the banking sector's dominant role in financial intermediation.
African banks also maintained capital and liquidity levels above international regulatory requirements, with the average capital adequacy ratio standing at 19.7%, exceeding the minimum standards set by the Basel Committee. Banks also reported strong liquidity coverage ratios in both local and foreign currencies.
Beyond banking, African capital markets continued to expand their role in financing the economy, with total stock market capitalization reaching 56% of the continent's GDP. The report also highlighted Africa's global leadership in mobile money adoption, supported by digital transformation efforts and regional payment system initiatives.
The report found that African central banks have implemented, on average, 61% of international financial stability best practices, while the continent's Financial Stability Index reached 0.55, reflecting improvements in banking sector resilience.
Despite global economic headwinds, Africa's economy recorded average growth of 3.2% in 2024, with total financial system assets reaching 126% of GDP, according to the report.
The African Financial Stability Committee, which oversees the report, was established following a proposal by CBE Governor Hassan Abdalla during the 2024 meetings of the Association of African Central Banks (AACB), with the aim of strengthening cooperation among African central banks on financial stability.
The report was prepared by experts from the central banks of Egypt, the West African States, Central African States, Rwanda, Mauritius, South Africa, Mozambique, and Eswatini.
