The 1960s were characterized by the pulling out of British colonial forces as several Anglophone countries gained their independence. However, today, another withdrawal is happening. And it is the banks not troops or administrators that are taking off.

The withdrawal of British banks from the continent may appear surprising to many especially as it comes at a time when economists, experts, and policymakers from the World Bank to the International Monetary Fund, the World Economic Forum to the United Nations Economic Commission for Africa, are propping the African renaissance story.

The bullish talk isn’t limited to foreigners either. African institutions such as the African Development Bank and regional economic commissions like SADC, ECOWAS, and COMESA, have in one way or another given impetus to the Africa is on the rise narrative. Whether that is happening as hyped in reports and data is another matter altogether, but what is clear is that British banks are leaning on the negative side of the debate.

Atlas Mara has become the latest venture to pull out of the continent. The U.K. financial conglomerate had acquired banks in seven African countries, but now it terms its African investments “risky” and the macroeconomic environment in the continent as “challenging.” The bank’s holding company, which is listed on the London Stock Exchange (LSE), says “currency volatility and drying up of liquidity in African markets adversely impacted its operations.”

The withdrawal of Atlas Mara marks a trend of British lenders waving goodbye to the continent. It also raises serious questions around the prospects of the banking industry in Africa. While there are many success stories of foreign companies that ventured into the continent i.e. Coca-Cola and Nestle, few lie in the financial institution industry.

Like other economies, the COVID-19 pandemic negatively impacted financial institutions across the continent, with many African central banks struggling to provide liquidity support for local banks impacted by the crisis. The IMF’s 2021 Financial Access Survey Trends and Developments report illustrates the huge blows Africa’s banking system took on. For example, Nigerian banks closed 234 branches in 2020.

In its annual financial statements for the 14 months to February 28, Atlas Mara said Africa’s equity market decline last year was 60% worse than in other emerging markets, reflecting a particular “risk-off” view of African investment.

Atlas Mara, founded in 2013, had set it eyes on becoming a leading player in Africa after acquiring banks in 15 different countries. The company quickly found out that translating targets into economic gains would be very difficult with high operating costs and a harsh business environment in most host countries proving insurmountable challenges.

“Major currency depreciation across the African markets in which the company operates resulted in a more than $145 million reduction in the dollar value of the company’s assets, and a decrease in the company’s debt capacity,”- Atlas Mara

“With already constrained fiscal environments and relatively limited assistance from central banks, African markets have been unable to mount economic responses as impactful as those in the US or the EU. Local currencies, debt and capital markets remain under considerable pressure,” said Michael Wilkerson, Atma’s chairman.

Happening Again

The withdrawal of Atlas Mara follows the famous pulling out of Barclays in 2016. The British lender had operated on the continent for over 100 years, but after reporting a 2% drop in profits and a dividend cut of more than 50% per share, Barclays reduced its 62% stake in Barclays Africa Group to a non-controlling stake of 14.9%. Barclays Plc also sold off business units it did not consider core operations and shifted attention to consumer, corporate, and investment banking in Europe and the U.S.

With the exit of Barclays Plc, Barclays Africa Group changed its name to Absa Group. The lender is listed on the Johannesburg Stock Exchange (JSE) and owns stakes in 14 African countries including Botswana, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria, Seychelles, South Africa, Tanzania and Uganda.

In April, Standard Chartered Bank also announced plans to reduce its global branch network by half to around 400. The British lender is looking to slash long-term expenses by permanently adopting changes to working practices and retail banking that were adopted due to the COVID-19 pandemic.

The announcement was also a follow up on an initial update made in 2014, when Standard Chartered said it would shut down up to 100 bank branches in Africa, Asia and the Middle East. The move was cited as an attempt to enhance profitability by cutting off 8% of its global network to save $400 million a year.


In the 2021 Regional Economic Outlook Report, the IMF noted that Africa would be the world’s slowest-growing region this year despite a more favorable external environment, mainly due to the health and economic crisis caused by the pandemic. But COVID-19 alone is not the reason why the African banking industry has proven a tough nut to crack. The reality is the continent is a fragmented market of 54 nations, each with its own currency, regulations, culture, opportunities, and risks that need to be assessed on a case-by-case basis.

Fragmentation leads to competition, with each country battling to be seen as the most noteworthy individual so as to eke out a larger share of foreign investment. The African Union is seeking to change that by formalizing the networks and synergies between African countries to leverage upon the international financial system.

“For Africa to be turbocharged, it needs to operate like a single market,” – Michael Jordaan, former Chief Executive of First National Bank and co-founder of one of South Africa’s digital banks, Bank Zero.

“For banking customers, this would enable ease of cross border payments and remittances,” he says. “For banks, it should enable them to operate across Africa without needing a new bank license in every country.”

The pulling out of foreign lenders could also be a blessing in disguise as it provides an opportunity for local players to strengthen their share of the market. In recent years, top lenders like Access Bank have been expanding operations across the continent looking to gather a slice of the untapped market.

Whereas banks are struggling, foreign investors remain bullish on the future of fintech and mobile money in reaching out to the 57 per cent of the African population do not have access to financial services. In August, SADC adopted a new cross-border payments system dubbed Transactions Cleared on an Immediate Basis (TCIB). TCIB allows for cross-border low-value payments that enable the immediate clearing of single credit “push” transactions that are settled on a deferred basis.

Simultaneously, research published in June by American firm Boston Consulting Group (BCG) found out that Ghana and Kenya have the second and third highest mobile payment usage in the world, after China. Both nations contributed a huge chunk to the value of global mobile financial services transactions in 2020, which it estimated to be between $15 trillion and $20 trillion.

The study titled “Five Strategies for Mobile-Payment Banking in Africa,” found that 87% of Kenya’s GDP is held in transactions via mobile wallets and phones and 82% in Ghana. The World Bank has recognized Ghana as the fastest growing mobile money market in Africa over the last five years and the continent accounted for 43% of all new mobile money accounts, according to

Experts attribute the rise of mobile money to the shortcomings of traditional banking in developing countries.

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