African Finance Update: Policy, Ratings, and Banking Trends

African markets are exhibiting mixed, but increasingly stabilizing, macroeconomic signals. South Africa has paused its rate-cut cycle despite easing inflation, while more economies are returning to single-digit price growth. Ratings actions are reshaping risk perception around sovereigns and multilaterals, and cross-border bank expansion is drawing closer scrutiny from credit agencies.

South Africa Holds Rates as Inflation Outlook Improves

Unlike African peers such as Ghana and Angola, the South African Reserve Bank maintained its benchmark interest rate at 6.75 percent. This pause occurred after cumulative cuts of 100 basis points over the past year from 7.75 percent. The Monetary Policy Committee voted 4–2 in favor of holding the rate, reflecting a slightly improved inflation outlook and a firmer currency, while signaling a more cautious forward stance. Policy patience is taking priority over rapid easing in Africa’s most developed financial market.

Fitch Withdraws Afreximbank Ratings, Cuts Credit Assessment to Junk

Fitch Ratings has withdrawn all ratings on the African Export-Import Bank for commercial reasons, ending its rating relationship with the Cairo-based lender. Simultaneously, the agency downgraded its credit assessment to BB+ (junk) from BBB-, with a stable outlook, following a dispute with the bank. This action complicates investor risk benchmarking for one of Africa’s key multilateral lenders.

Single-Digit Inflation Returns Across More African Economies

A growing number of African economies are re-entering single-digit inflation territory, indicating a gradual macro stabilization shift. Over the past five months, Ghana, Ethiopia, Zambia, and Zimbabwe have all returned to single-digit inflation, driven by tight monetary policy, currency stabilization, and reform programs. They now join relatively stable peers such as South Africa, Kenya, and Tanzania. Disinflation is reopening room for selective rate cuts and improving local bond market sentiment.

Nedbank’s $856m NCBA Deal Raises Risk Exposure — Moody’s

Moody’s indicates that Nedbank Group’s planned acquisition of a 66 percent stake in NCBA Group will increase the lender’s exposure to higher-risk African markets. The deal raises sensitivity to macro volatility, SME credit risk, and foreign-exchange movements in jurisdictions with weaker credit profiles than South Africa. Pan-African banking expansion continues, but with higher capital and risk-weight consequences.

Kenya Upgraded by Moody’s as Default Risk Eases

Moody’s upgraded Kenya’s sovereign rating to B3 from Caa1, its highest level since July 2023, citing reduced near-term default risk and stronger external liquidity. The outlook was revised to stable, supported by higher foreign-exchange reserves, a narrower current-account deficit, improved exchange-rate stability, and better market access. This upgrade precedes a planned up to $2 billion Eurobond issuance following liability-management operations. Rating momentum is improving for reform-aligned sovereigns regaining market access.

Bunmi Bailey holds a degree in Economics from the University of Lagos and has over eight years of experience in content writing and journalism. Her career spans roles as a financial and business journalist at BusinessDay Media and TechCabal, and as Head of Research at SBM Intelligence, an Africa-focused market intelligence and strategic consulting firm. She also served as Editor at Finance in Africa, a subsidiary of Businessfront and is currently Assistant Editor, Finance (Africa), at BusinessDay.