According to Frank Mwiti, Chief Executive Officer of the Nairobi Securities Exchange, Africa's banking sector achieved a return on equity (ROE) of 19% in 2024, nearly double the global average. This performance suggests that the continent's growth potential has been persistently undervalued by global investors.
Mwiti argues that this mispricing stems from outdated perceptions of risk, despite improvements in governance, digital infrastructure, and macroeconomic stability across many African economies. The banking sector's strong returns are driven by increased financial inclusion, mobile money adoption, and a growing middle class.
However, challenges remain, including currency volatility, regulatory fragmentation, and infrastructure gaps. Mwiti calls for continued reforms to attract long-term capital and unlock the full potential of Africa's markets.
