Accra — Across Africa’s diverse financial landscape, three distinct narratives are unfolding this week. In Kenya, banks remain trapped under the weight of bad loans despite aggressive rate cuts. In South Africa, global fund managers are seeing the Iran conflict as a rare buying opportunity. And in Zimbabwe, officials are declaring their currency deeply undervalued even as structural doubts persist.
These stories reflect the varied realities of African banking and markets—from structural distress in credit books to geopolitical dislocations creating value, and from gold-backed currency experiments to the persistent challenge of building monetary trust.
Here is your complete Accra Street Journal roundup of the key banking and markets developments across the continent.
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Kenyan Banking Pressure: Bad Loans Remain East Africa’s Worst Despite Rate Cuts
Despite a series of interest rate reductions by the Central Bank of Kenya, banks in the country remain under significant pressure due to high levels of bad loans, with the sector carrying the heaviest non-performing loan burden in East Africa .
According to the FY25 Kenya Banking Sector Report by Wall Street Africa Group, Kenya’s banking sector ended FY25 with an estimated non-performing loan (NPL) ratio of approximately 15.5 per cent . That figure is starkly higher than regional peers: Tanzania at 3.3 per cent, Uganda at 3.7 per cent, and Rwanda at 4.1 per cent . Even after some recovery, Kenya remains more than 11 percentage points worse than its neighbours on bad loans.
Why the Gap Persists
The report attributes this persistent gap to a mix of legacy loan books, the impact of the high-rate cycle, distress in construction and real estate, and delays in government payments to contractors . In other words, the problem is not just cyclical—it is also structural.
Government payment delays continue to hurt sectors linked to public contracts, especially construction. This has made asset quality one of the hardest issues for several banks to fully resolve, even as lower rates begin to ease pressure elsewhere in the economy .
The Rate Cut Context
The Central Bank of Kenya has delivered a historic tenth consecutive rate cut since August 2024, bringing the benchmark Central Bank Rate to 8.75 per cent—the lowest level since January 2023 . Inflation has remained stable at around 4.4 per cent, and private-sector credit growth has accelerated to 6.4 per cent .
However, the transmission of these cuts to the real economy has been incomplete. The Kenya Bankers Association has noted that while recent cuts have helped ease short-term interest rates and support lending, “structural challenges in the financial system mean these benefits are taking time to fully reach businesses and households” .
Average lending rates have eased to 14.8 per cent in January 2026, down from 17.2 per cent in November 2024 . But banks remain cautious due to heightened lending risks and high levels of non-performing loans, leading to tighter credit conditions and constraining faster lending growth .
Winners and Laggards Among Kenyan Banks
There were clear differences among lenders. Standard Chartered Kenya and Stanbic remained the strongest asset quality names, ending FY25 with NPL ratios of 5.5 per cent and 8.0 per cent respectively . KCB showed one of the biggest improvements, reducing its NPL ratio to 16.9 per cent from 19.2 per cent, while Equity improved to 11.5 per cent .
Co-operative Bank, however, remains one of the sector’s more difficult credit stories. Its NPL pressure is heavily concentrated in construction and real estate, meaning its recovery is closely linked to government disbursements rather than just internal credit management .
Outlook for 2026
Lower interest rates can help reduce fresh stress in loan books, but they do not automatically solve old problem assets. Unless the pending-bills issue improves and banks continue to work through legacy exposures, Kenya’s bad loan problem is likely to remain the biggest drag separating it from East African peers .
For investors, the headline is simple: profitability may improve, but asset quality is still the sector’s biggest unresolved risk .
South African Stocks: Iran War Selloff Creates Rare Buying Opportunity, Says Ninety One
Despite the turmoil triggered by the conflict in Iran, a $232 billion global asset manager is urging investors to look past the volatility and see opportunity in South African equities .
Ninety One Plc remains constructive on South African stocks, arguing that the war-driven selloff has created prices that are lower than justified by company earnings outlooks .
The Selloff in Numbers
South Africa’s benchmark FTSE/JSE All Share Index remains more than 5 per cent lower since the conflict began, despite recovering from earlier losses . That marked a sharp reversal after the market logged 12 straight monthly gains through February—its longest winning streak on record .
The precious metals and mining sector, which accounts for roughly a quarter of the benchmark index, has dropped 13 per cent since early March as gold and platinum prices retreated .
However, earnings expectations across the market have remained largely unchanged. Bloomberg data showed projected 12-month earnings per share for the FTSE/JSE All Share Index had fallen only about 4 per cent since the start of the conflict . This disconnect between price and earnings is what Ninety One sees as the opportunity.
What Ninety One Is Buying
Hannes van den Berg, a Cape Town-based portfolio manager at Ninety One, told Bloomberg that the firm remains constructive on miners, banks, and insurers, while being more cautious on consumer-facing companies such as discretionary retailers, which are more exposed to weak household spending .
“There are still strong opportunities in resources, financials, and global growth themes,” Van den Berg said. “Those drivers haven’t fundamentally changed” .
Several longer-term investment themes still support the country’s equities, including demand for critical minerals, supply constraints in commodities, and continued investment linked to artificial intelligence infrastructure .
Broader Investor Sentiment
Ninety One is not alone in seeking these opportunities. A Bank of America Corp. survey conducted between April 2 and 9 found that a net 81 per cent of fund managers see more buys than sells in South African stocks, up from 69 per cent in the previous poll . Half of respondents viewed South African equities as undervalued .
The JSE is Africa’s largest stock exchange, with a market capitalisation of more than $1.47 trillion as of early 2026, making it a key gateway for international investors seeking exposure to African markets .
A Disciplined Approach to Volatility
Geopolitical shocks often create temporary mispricing opportunities for disciplined investors. “These events are not enjoyable, but they do create opportunity,” Van den Berg told Bloomberg. “Our job is to take advantage of mispricing, within a disciplined framework” .
Currency Valuation: Zimbabwe Says ZiG Deeply Undervalued Amid Ongoing Reforms
Zimbabwe’s government has recently stated that its currency, the Zimbabwe Gold (ZiG), is deeply undervalued, even as the country pursues ongoing economic reforms aimed at stabilising the monetary system .
The ZiG exchange rate against the US dollar closed the first quarter of 2026 at US$1: ZiG 25.32, reflecting a quarter-on-quarter appreciation of 2.6 per cent and a year-on-year gain of 5.7 per cent . This indicates a foreign exchange market with low volatility compared to the chaotic swings of previous years.
Signs of Stability—And Fragility
The relative calm is anchored by prudent money supply management, fiscal restraint, increased foreign currency inflows, and significant accumulation of official reserves, reported at about 1.2 months of import cover . Annual inflation, once running in triple digits, has fallen into the single-digit range—one of the most notable macroeconomic turnarounds in recent memory .
However, economists warn that beneath the calm lies a fragile foundation. The ZiG lost roughly half its value in its first year, including a more than 40 per cent devaluation in September 2024, which adjusted the rate from about US$1: ZiG 13.56 at launch to US$1: ZiG 26.36 .
Deep dollarisation remains a significant issue, with over 80 per cent of bank deposits, loans, and corporate earnings reported in US dollars, and basic goods and services largely priced and transacted in US dollars . Certain government agencies are still hesitant to adopt the local currency—passports, fuel, licences, and user fees are priced exclusively in US dollars .
The Fungibility and Convertibility Challenge
Economic analyst Zvikomborero Sibanda argues that the ZiG faces two fundamental challenges: fungibility and convertibility .
Fungibility is an intra-currency property—whether each ZiG is always equal in value to another ZiG, regardless of whether it is held in a mobile wallet, bank deposit, physical banknote, or government security. During the peak of RTGS-dollar distortions from 2019 to 2021, electronic money traded at a 60 to 80 per cent discount relative to physical US dollars, a textbook failure of fungibility .
Convertibility determines whether ZiG holders can freely and fairly exchange their currency for US dollars or other globally accepted mediums of exchange. The clearest indicator of convertibility failure is the parallel market premium, which signals that the official rate is overvalued and the market is pricing in convertibility risk .
For the Zimbabwe dollar, the ZiG’s predecessor, this premium reached over 150 per cent at its lowest point, rendering the official rate largely fictional .
New Banknotes and the Path Forward
In April 2026, the Reserve Bank of Zimbabwe launched new ZiG banknotes (ZiG10, ZiG20, and ZiG50) with higher anti-counterfeiting standards and durable materials, as part of a broader effort to enhance the local currency’s competitiveness and accelerate “de-dollarisation” .
The central bank reports that the ZiG monetary system is backed by approximately $1.3 billion in foreign exchange reserves, roughly twice the size of ZiG deposits in the banking system .
However, as Africa Confidential notes, similar gold-backed experiments in the past—including gold coins and bullion-backed digital tokens—have failed to convince markets that they were long-term measures . About three-quarters of transactions in Zimbabwe are now in US dollars, compared with a third in 2020 .
The Verdict
While the current stability appears genuine, it remains fragile, resting on a foundation with unresolved structural weaknesses. As Sibanda concludes, “Zimbabwe cannot afford another failed currency. The ZiG was initially backed by strong structural support and a clear monetary strategy. That strategy can still succeed, but it depends on the RBZ acting not just as a transaction regulator, but as a builder of monetary trust” .
Outlook From ASJ
The three markets tell different stories, but common threads emerge.
Kenya demonstrates that monetary policy easing alone cannot resolve structural credit problems. Government payment delays, construction sector distress, and legacy loan books will continue to weigh on banks regardless of the central bank’s rate trajectory.
South Africa shows how geopolitical shocks can create dislocations that disciplined investors can exploit. The JSE’s selloff has been sharper than the hit to earnings, and global fund managers are taking notice.
Zimbabwe illustrates the long, difficult road to monetary credibility. The ZiG has shown rare stability, but fungibility and convertibility challenges remain unresolved. The government’s claim that the currency is undervalued may be correct, but convincing the market will require more than statements—it will require structural reform.
For investors and policymakers across the continent, these are the stories to watch.
Frequently Asked Questions (FAQs)
1. Why are Kenyan banks still under pressure despite interest rate cuts?
Kenyan banks remain under pressure due to a high non-performing loan ratio of approximately 15.5 per cent—the worst in East Africa. The problems are structural, not just cyclical: legacy loan books, distress in construction and real estate, and delays in government payments to contractors have all contributed. While lower interest rates can reduce fresh stress, they do not automatically solve old problem assets .
2. What is the buying opportunity in South African stocks?
According to Ninety One, a $232 billion global asset manager, the Iran war-driven selloff has created prices that are lower than justified by company earnings. The FTSE/JSE All Share Index remains more than 5 per cent lower since the conflict began, but earnings expectations have fallen only about 4 per cent. Ninety One sees value in miners, banks, and insurers .
3. What is the current exchange rate of Zimbabwe’s ZiG currency?
The ZiG exchange rate against the US dollar closed the first quarter of 2026 at US$1: ZiG 25.32, reflecting a quarter-on-quarter appreciation of 2.6 per cent and a year-on-year gain of 5.7 per cent. However, the currency lost roughly half its value in its first year, including a 40 per cent devaluation in September 2024 .
4. What does “fungibility” mean for a currency?
Fungibility means that each unit of a currency is always equal in value to another unit of the same currency, regardless of whether it is held in a mobile wallet, bank deposit, physical banknote, or government security. In Zimbabwe’s recent monetary history, electronic money traded at a 60 to 80 per cent discount relative to physical US dollars—a textbook failure of fungibility .
5. How does Kenya’s NPL ratio compare to its regional peers?
Kenya’s NPL ratio of approximately 15.5 per cent is far above regional peers: Tanzania at 3.3 per cent, Uganda at 3.7 per cent, and Rwanda at 4.1 per cent. Even after some recovery, Kenya remains more than 11 percentage points worse than its neighbours on bad loans .
6. What is the investment case for South African equities right now?
The investment case rests on a disconnect between price and earnings. South African stocks have sold off due to the Iran conflict, but earnings expectations have remained relatively stable. Ninety One points to strong opportunities in resources, financials, and global growth themes, arguing that these fundamental drivers haven’t changed despite the volatility
Source: Accra Street Journal
Last Updated on April 21, 2026 by Samuel Kwame Boadu
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Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.
