Monetary policy, banking regulation and financial-market reforms shaped Africa’s financial sector during the week. The Central Bank of West African States (BCEAO) maintained its main policy rate at 3% as economic growth across the West African Economic and Monetary Union (WAEMU) remained resilient and inflation subdued. In Kenya, the central bank proposed revised prudential and risk-management guidelines and a framework for domestic systemically important banks, while Ghana introduced measures to address high non-performing loans. Financial market developments were also significant. South Africa’s current account returned to deficit in the second quarter, while the Bank of Ghana introduced a new foreign-exchange operations framework and centralised foreign exchange (FX) trading platform. Morocco’s Casablanca-Settat region completed the country’s first regional-authority bond issuance, while the Pan-African Payment and Settlement System (PAPSS) reported significant growth in cross-border payment activity as its network expanded across more than 30 African markets. Read more on the week’s key developments: 1. BCEAO holds policy rate at 3% as WAEMU growth remains resilient The Monetary Policy Committee of the Central Bank of West African States decided on 9 September to maintain its main policy rate at 3.00% and the marginal lending facility rate at 5.00%. The reserve requirement ratio applicable to regulated institutions was also maintained at 3.00%. Inflation across the West African Economic and Monetary Union stood at 0.4% in the second quarter of 2026, compared with -0.2% in the previous quarter, while the central bank expects average inflation of 1.0% for the full year. Economic activity remained relatively strong, with gross domestic product (GDP) growth estimated at 6.0% year-on-year in the second quarter and projected at 6.1% for 2026. Private-sector bank credit growth accelerated to 6.6% at end-June from 6.0% at end-March. The combination of subdued inflation and resilient economic and credit growth gives the BCEAO scope to maintain current monetary conditions, although geopolitical tensions and energy prices remain potential sources of inflationary pressure. 2. CBK proposes revised prudential rules and D-SIB framework The Central Bank of Kenya (CBK) issued revised draft Prudential Guidelines, Risk Management Guidelines and Guidance Notes on 10 September, together with a proposed framework for Domestic Systemically Important Banks (D-SIBs). The documents have been released for public consultation, with comments due by 7 November. The proposals could strengthen Kenya’s supervisory architecture, particularly through a dedicated framework for institutions whose distress could have broader implications for financial stability. For banks, the eventual requirements could affect capital, risk management, governance and supervisory expectations. Their impact will depend on the final rules adopted following consultation and how requirements are calibrated according to institutions’ size and systemic importance. 3. Bank of Ghana introduces measures to address high levels of non-performing loans The Bank of Ghana reviewed its policy on problem assets and introduced new regulatory measures on 10 September aimed at addressing high levels of non-performing loans (NPLs) across banks, specialised deposit-taking institutions and non-bank financial institutions. The regulator said elevated NPLs pose risks to institutions’ profitability, liquidity and solvency as well as broader financial-system stability. The measures increase supervisory pressure on financial institutions to address distressed assets and strengthen the management of credit risk. Effective implementation could support asset-quality improvement and preserve banks’ capacity to extend new credit, although the impact will depend on recoveries, write-offs, restructuring and improvements in underwriting and credit-risk management. 4. South Africa’s current account returns to deficit in second quarter South Africa’s current-account balance shifted to a deficit equivalent to 2.6% of GDP in the second quarter of 2026, reversing a surplus of 2.3% in the first quarter, according to data released by the South African Reserve Bank on 10 September. The reversal marks a deterioration in South Africa’s external balance and increases the importance of monitoring trade flows, investment income and capital inflows in the coming quarters. Quarterly current-account movements can be volatile, but a sustained deficit would have implications for the country’s external financing position, the rand and broader domestic financial conditions. 5. Bank of Ghana introduces new FX framework and centralised trading platform The Bank of Ghana announced a new Foreign Exchange Operations Framework on 10 September, clarifying the objectives and principles governing its interventions in the foreign-exchange market. The framework supports the central bank’s inflation-targeting mandate and flexible exchange-rate regime, under which the cedi remains market determined. The regulator also launched a centralised foreign-exchange trading platform for FX bureau and introduced a new methodology for calculating its Foreign Exchange Market Reference Rate. Together, the measures point to a more structured approach to FX-market operations, pricing and oversight. Their effectiveness will depend on market adoption and whether they contribute to greater transparency and deeper formal-market liquidity. 6. EBRD backs Morocco’s first regional-authority bond The European Bank for Reconstruction and Development (EBRD) announced on 11 September that it is investing EUR 36.8 million ($42.7 million) in a EUR 92 million ($106.7) domestic bond issued by the Casablanca-Settat region. It is the first bond issued by a Moroccan regional authority and only the second municipal bond issuance in the country. The proceeds will support investments under the region’s 2022–2027 Regional Development Plan. The transaction introduces an additional funding channel for Morocco’s regional authorities and could support the development of a deeper domestic municipal bond market. The local-currency structure also demonstrates the potential for sub-sovereign entities to diversify their financing sources, although further issuance by other regions will be an important test of whether a broader market develops. 7. Capitec Bank sanctioned over FIC Act breaches The South African Reserve Bank’s Prudential Authority imposed administrative sanctions on Capitec Bank on 11 September, following a 2023 inspection that identified non-compliance with provisions of the Financial Intelligence Centre Act. The sanctions comprise five cautions and a financial penalty of ZAR 28 million ($1.7 million), of which ZAR 5.5 million ($330,000) is conditionally suspended for 36 months. The regulator identified deficiencies in customer due diligence, enhanced and ongoing due diligence, employee training and elements of the bank’s Risk Management and Compliance Programme, including controls relating to terrorist-property reporting and financial sanctions. The action reinforces regulatory expectations around financial-crime controls at large retail banks. The Prudential Authority said Capitec has cooperated to remediate the identified compliance deficiencies and control weaknesses. The sanctions do not in themselves indicate broader financial weakness at the bank, but highlight the regulatory and operational requirements associated with maintaining effective anti-money laundering and counter-terrorist financing controls. 8. EBRD launches EUR 15 million trade-finance facility with Ecobank Senegal The EBRD announced on 11 September 2026 the launch of its first trade-finance facility in Senegal, providing up to EUR 15 million ($17.3 million) to Ecobank Senegal under its Trade Facilitation Programme. The facility will support import and export transactions by allowing Ecobank Senegal to issue guarantees to confirming banks against political and commercial payment risks, while expanding access to trade finance for local businesses, including MSMEs. Ecobank Senegal will also gain access to the EBRD’s international network of partner banks. The facility strengthens Ecobank Senegal’s international banking links and capacity to support companies engaged in cross-border trade. While EUR15 million is relatively modest compared with overall regional trade-finance needs, the transaction establishes a new EBRD banking relationship in Senegal. The EBRD’s Trade Facilitation Programme currently covers 28 economies, more than 130 issuing banks and over 800 partner banks, and has supported more than 36,000 transactions with a cumulative volume exceeding EUR42 billion. 9. PAPSS expands across more than 30 African markets as transaction activity accelerates The Pan-African Payment and Settlement System (PAPSS) reported on 11 September that its network now operates in more than 30 African countries across all five regions, connecting 24 national and regional central banks, more than 200 commercial banks and payment service providers and 16 switches. Through partnerships, its termination footprint extends to more than 300 financial institutions. PAPSS reported that transaction volumes increased by approximately 1,000% between comparable periods in 2025 and 2026, while transaction values increased by around 120%. The increase provides evidence that PAPSS is progressing from network expansion towards greater transaction adoption. However, the growth rates come from an earlier-stage base and activity is not necessarily evenly distributed across markets. Continued growth in transaction volumes and values across a broader range of corridors will be important in assessing whether PAPSS develops into scaled infrastructure for intra-African payments. 10. AfDB and African deposit funds deepen cooperation on long-term financing The African Development Bank Group (AfDB) and members of the African Forum of Deposit Funds agreed on 9 September to strengthen cooperation aimed at mobilising more long-term financing for sustainable development, productive investment, economic resilience and inclusive growth across Africa. Areas of cooperation include co-financing, joint operations, resource mobilisation and the development of investment vehicles and platforms. The initiative reflects broader efforts to mobilise more domestic institutional capital for African development and productive investment. Long-term savings institutions could provide an additional source of patient capital for infrastructure and private-sector financing. However, the agreement establishes a cooperation framework rather than a quantified financing commitment, so its significance will depend on the scale and nature of subsequent investments. What to watch The South African Reserve Bank Monetary Policy Committee decision (23 September), the Bank of Ghana Monetary Policy Committee decision (24 September), and the Central Bank of Egypt Monetary Policy Committee meeting (24 September). TAB Africa Weekly Brief tracks key developments reshaping Africa’s banking sector and what to watch. Subscribe via LinkedIn.
