(JUBA) – A growing number of international banks are withdrawing from African markets after decades of operation, citing falling profit margins, rising compliance costs and strong competition from telecom led mobile money platforms. While most exits have taken place in West and Southern Africa, banking analysts warn that the trend could affect regional financing flows into South Sudan, particularly as the country prepares to open new sectors to external capital.
A report released on 24 September by global rating agency Moody’s shows that at least seven major foreign banking groups, including Barclays, Standard Chartered, BNP Paribas, HSBC, Credit Agricole, Groupe BPCE and Societe Generale, have either sold or scaled down their African operations since 2019.
According to Moody’s, Western lenders once saw Africa as a promising banking frontier. However, returns have weakened when adjusted for currency depreciation and regulatory capital obligations. At the same time, mobile money services such as M-Pesa, MTN Mobile Money and Orange Money have taken over mass market banking, especially in areas where formal branches are limited.
Why International Banks Are Leaving
| Key Challenge | Business Effect |
|---|---|
| Competition from mobile money and fintech platforms | Loss of retail market share and transaction revenue |
| Weakening local currencies | Reduced earnings when converted to US dollars or euros |
| Rising compliance costs due to Anti Money Laundering and Counter Terrorism Financing rules | Higher operating costs |
| Political instability and sanctions in multiple countries | Difficulty in repatriating profit |
| Regional conflict and terrorism | Increased operational risk |
The agency also noted that twelve African countries are currently listed on the Financial Action Task Force grey list for money laundering risks, including South Sudan’s key trade partners. United States sanctions are in place on nine African states, making cross border settlements more difficult.
Standard Chartered Plc, present in Africa for around one hundred and fifty years, is gradually exiting. In 2022 it announced plans to leave Angola, Cameroon, Gambia, Sierra Leone and Zimbabwe, while also withdrawing from personal and business banking in Tanzania and Ivory Coast. In July 2023, Access Bank acquired its remaining shareholdings. The lender made a loss of 217 million dollars (about 1.54 trillion South Sudan Pounds at 7,100 SSP to one US dollar) on the sale, mainly due to currency translation losses in Harare.
Barclays, another historic lender on the continent, completed its exit in 2017 by cutting its shareholding in Barclays Africa Group from 62.3 percent to 14.9 percent. UK investment group Atlas Mara also abandoned its African strategy between 2020 and 2023, selling its positions in Mozambique, Rwanda, Tanzania, Botswana and Zambia, citing the Covid pandemic and macroeconomic pressure.
French bank Societe Generale has been the latest to retreat. It has sold majority stakes in Mozambique, Burkina Faso, Chad and Mauritania, with further divestments under negotiation in Equatorial Guinea, Guinea Conakry and Benin. In some markets such as Cameroon and Congo, local governments exercised first refusal and nationalised operations.
For South Sudan, which is seeking to diversify its banking landscape beyond Kenya based institutions and local players, the shift poses both risks and openings. Industry observers say that while traditional foreign banks are exiting, regional African lenders and digital first financial firms may step in with more flexible models.
However, economists warn that international exits could limit access to global correspondent banking channels, affecting foreign exchange availability and trade settlement. With the South Sudan Pound currently trading at around 7,100 to one US dollar, further pressure on international banking links could make dollar liquidity even tighter.
Analysts believe that South Sudan could avoid similar exits if it prioritises banking stability, supports mobile money integration and improves compliance mechanisms. With oil export earnings fluctuating and public financial reforms still in progress, a sudden withdrawal of foreign banking partners could slow planned investments in energy, agriculture and telecommunications.
The message from global lenders is clear Africa remains attractive, but only where operations can be scaled efficiently and political risk is contained.