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Building Africa’s next broadband economy beyond just connectivity

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Building Africa’s next broadband economy beyond just connectivity

Broadband connectivity has become a foundation of Africa’s digital economy. But as the continent enters its next phase of digital development, the question is no longer simply how to connect more people. It is how to provide connectivity that is affordable, abundant, scalable and capable of supporting increasingly data-intensive digital lives and businesses. Broadband is increasingly shaping how people access education, healthcare, financial services, employment and digital commerce, while enabling businesses to participate more effectively in the digital economy.

The economic impact is significant, but GDP figures can make that impact feel abstract. What matters just as much is what connectivity enables at community level. Research sponsored by Nokia and conducted by the Bureau for Economic Research (BER) at Stellenbosch University provides a useful illustration. Research in Kayamandi, a township in Stellenbosch, found that home fibre had a meaningful impact on economic participation, helping workers transition towards more stable employment. Among dwellings that had fibre for the longest period, home fibre was also associated with more than a twofold increase in the probability of self-employment. Residents used fast, affordable internet to find better or alternative work and to start or expand micro-enterprises.

The research demonstrates that meaningful connectivity is about far more than putting a signal within reach. It can influence how people work, learn, search for opportunities and participate in the economy.

From coverage to capacity

Africa has made significant progress in expanding broadband coverage, but the next challenge is ensuring networks can keep pace with demand. As adoption increases, consumers are likely to move from relatively modest data consumption towards significantly higher usage. Fibre-to-the-home (FTTH), 4G and 5G will all play important roles, particularly in densely populated areas.

This requires investment across the entire connectivity ecosystem. Increasing capacity at the network edge is not enough if the underlying optical and IP infrastructure cannot handle the additional traffic. Data generated by consumers and businesses ultimately converges into aggregation networks, optical infrastructure and internet access networks, all of which need to scale alongside access networks.

The broadband challenge is therefore multifaceted: Africa needs more access, more capacity and greater affordability, supported by infrastructure that can scale sustainably. The Kayamandi experience also shows why the quality and affordability of access matter. In Africa in particular, connectivity becomes transformative when people can use it not simply to communicate, but to acquire skills, find employment, run businesses and access new economic opportunities.

Rural connectivity requires a different approach

There is no single technology capable of connecting every African citizen, community and business. Geography, population density and the economics of deployment vary dramatically across the continent.

Africa’s broadband future will therefore increasingly be characterised by technological complementarity. Low Earth orbit (LEO) satellite technology can extend coverage into deep rural areas where terrestrial infrastructure may be difficult or uneconomic to deploy. While satellite connectivity may not always resolve affordability challenges, it can provide a baseline level of service where connectivity options have historically been limited.

At the same time, 4G and 5G can extend further into rural and peri-urban areas, while fibre provides the high-capacity foundation required in densely populated communities and business districts. The objective should not be to choose one technology over another, but to deploy the right combination for each environment.

The Kayamandi research also provides an important reminder that connectivity is an enabler, not a silver bullet. Within the study period, fibre did not draw large numbers of economically inactive residents into the labour force or raise overall employment. Its clearest impact was among people already working, including those in casual employment, where fibre supported transitions towards more stable, full-time work.

For policymakers, this distinction matters. Broadband investment needs to be complemented by skills development, economic opportunity and other interventions that allow people to convert connectivity into sustainable livelihoods.

Policy and investment must keep pace

Making this multi-technology model work will require more than technological innovation. Policy and regulation will be equally important. Infrastructure sharing and neutral-host models can help operators reduce deployment costs, particularly where building multiple competing networks independently may not be commercially viable. Sharing infrastructure, sites or spectrum under appropriate regulatory frameworks can improve the economics of rural deployment while reducing duplicated capital expenditure.

The same principle applies to fibre. Deploying FTTH at national scale requires operators to predict how long deployment will take, what it will cost and what regulatory requirements they will face. Differences between municipalities, provinces and countries can create uncertainty and slow deployment.

Removing unnecessary administrative barriers and creating more predictable deployment environments can therefore directly influence the pace at which broadband reaches communities.

Continuity of capital is equally important. Large-scale fibre deployments require substantial upfront investment, particularly for trenching and civil works. If programmes repeatedly start and stop because funding becomes unavailable, operators lose the efficiency that comes from continuous deployment.

Broadband networks should therefore be viewed as infrastructure platforms that require sustained investment as demand evolves. Banks, development finance institutions (DFIs), export credit agencies (ECAs) and other infrastructure investors can support models that enable continuous deployment rather than fragmented investment cycles.

AI will help networks deliver more

As demand increases, operators will also need to extract more value from existing infrastructure. This is where artificial intelligence is becoming increasingly important. AI can optimise network operations and improve asset utilisation, while GPU-based computing at network sites can enable additional capacity and intelligence. This is particularly relevant where spectrum and physical infrastructure are constrained.

Rather than relying exclusively on new physical infrastructure every time demand increases, operators can increasingly use AI and automation to make existing networks more efficient and responsive. This will become even more important as networks evolve towards 5.5G and beyond, and as connected devices and data-intensive applications proliferate.

Africa’s broadband future will be defined by convergence

Africa’s next broadband era will not be defined by a single access technology. It will combine LEO satellite connectivity for the most remote areas, increasingly capable 4G and 5G networks extending into rural and peri-urban communities, 5G Advanced delivering greater capacity, and FTTH providing high-capacity connectivity where population density supports it.

The differentiator will be how effectively these technologies work together. Operators will need to manage increasingly complex, multi-technology environments while controlling operational costs, making automation an essential layer across the connectivity ecosystem.

For policymakers, the priority should be creating an environment that encourages investment, infrastructure sharing and predictable deployment. For operators, it means building flexible networks that can evolve with demand. For investors, it means recognising broadband as long-term strategic infrastructure rather than simply another telecommunications asset.

Most importantly, Africa needs to move the conversation beyond connectivity for connectivity’s sake. The real opportunity is to create an environment where people and businesses can use broadband abundantly, affordably and productively. The Kayamandi research shows that affordable fibre was associated with greater use of the internet for learning and job searches, more stable employment among people already participating in the labour market, and more than a doubling in the probability of self-employment among households with the longest fibre exposure.

Africa’s digital future will depend not simply on how many people are connected, but on the quality, capacity and affordability of those connections. The next broadband revolution, therefore, will not be about finding one technology that solves Africa’s connectivity challenge. It will be about bringing multiple technologies, sustainable investment, enabling regulation and intelligent automation together to create networks capable of supporting the continent’s next phase of digital growth.

Toni Pellegrino is Head of Sub-Sahara Africa and Managing Director of Nokia South Africa

Experts urge NBE to tighten oversight as banking sector expands and rate volatility grows

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Experts urge NBE to tighten oversight as banking sector expands and rate volatility grows

Financial experts are urging the National Bank of Ethiopia (NBE) to expand its supervisory capacity and enforce stricter regulatory safeguards as the country’s financial sector grows rapidly. Although the industry has recorded strong growth in recent years, analysts warn that aggressive interest-rate competition, structural vulnerabilities and high-risk lending practices could undermine long-term stability.

The calls follow a regulatory directive issued by NBE Vice Governor Solomon Desta. Under Directive No. FS/SD/442/2026, the central bank prohibited commercial banks from calculating, compounding or paying interest on savings accounts before the maturity of the deposit term. The directive effectively closes a loophole that had been widely used during a period of intense competition among banks.

The policy prohibits banks from adding unearned interest to a depositor’s principal balance or making advance interest payments through digital or conventional channels. Such practices had become increasingly common as banks sought to attract deposits, particularly from large corporate clients.

Worku Lemma, a veteran financial expert and former senior banking executive, told Capital that the NBE’s intervention was timely and necessary. However, he said banning advance interest payments should be only the first step.

According to Lemma, aggressive liquidity-generation strategies adopted over the past five to six years have evolved into complex arrangements that can artificially strengthen banks’ balance sheets.

“When you pay interest upfront, you are essentially generating artificial liquidity,” Lemma said. “If a customer deposits ETB 500 million for a five-year term and collects the interest immediately, the cumulative payout can easily exceed the principal deposit. This creates phantom liquidity on paper that is backed by no real cash reserves.”

To capture liquidity, some institutions raised long-term deposit rates to between 24% and 26%, with certain contracts reportedly reaching as high as 30%. These arrangements gave corporate customers with substantial bargaining power the opportunity to negotiate unusually favourable terms.

Beyond securing high rates, some corporate depositors were able to negotiate full interest payments in advance. Analysts argue that, rather than supporting productive investment, part of this liquidity may have been channelled into speculative activities, including land acquisition.

Advance interest payments can also distort a bank’s financial position. Recognising multi-year interest expenses immediately may weaken the matching of income and expenses, strain liquidity planning and obscure the institution’s true funding cost over time. Experts say this makes effective asset-liability management, liquidity monitoring and transparent disclosure more important.

The NBE’s latest Financial Stability Report shows a mixed picture of sector resilience. The banking industry’s aggregate liquidity ratio stood at 30.4%, more than twice the minimum regulatory threshold and the strongest position recorded over the preceding five fiscal years.

However, the sector-wide figure masks serious weaknesses at individual banks. A liquidity stress test found that 16 commercial banks failed the regulator’s liquidity sensitivity assessment for the financial year ending June 2025, although this was an improvement from 20 banks in the previous year. The affected banks have been instructed to submit recovery plans and strengthen their internal liquidity and contingency-management tools.

The report indicates that the sector as a whole remained above the 15% minimum liquidity threshold after the simulated shock, with the post-shock liquid-assets-to-deposits ratio improving to 17.3%. Nevertheless, the differing capacity of banks to withstand large withdrawals remains a key supervisory concern.

Market concentration also remains pronounced. The Commercial Bank of Ethiopia, the country’s sole systemically important bank, accounts for roughly half of sector assets. While the NBE says CBE passed the major stress tests conducted at the end of June 2025, the concentration of assets in one institution requires continued monitoring.

Yisehak Teka Nibere, a former NBE regulator and commercial-bank risk and compliance manager, said the central concern is not an absolute shortage of cash but weaknesses in asset-liability management and credit governance.

“Banks must move away from destructive, volume-driven price wars and reorient their credit portfolios toward high-quality, productive sectors that drive real economic expansion,” Yisehak told Capital.

The crackdown on advance interest payments comes as the NBE transitions from direct administrative controls to an interest-rate-based monetary-policy framework.

In July, the central bank fully removed the long-standing annual private-sector credit-growth cap, which had most recently stood at 24%. The decision marked a shift away from direct lending controls toward indirect, price-based instruments. At the same time, the NBE raised its policy rate by one percentage point, from 15% to 16%, saying the rate increase was needed to prevent the removal of the credit cap from easing overall financial conditions.

The NBE also introduced a targeted additional reserve requirement for banks whose loan-to-deposit ratios are assessed to be contributing to inflationary pressure. The central bank has described the measures as a change in policy instruments rather than a loosening of its monetary stance.

The transition gives commercial banks greater room to negotiate deposit terms with customers. But analysts say liberalisation also creates a stronger need for vigilant supervision, particularly when banks compete aggressively for deposits.

Rather than encouraging healthy competition, some analysts argue that the removal of restrictions helped fuel a rate war as private banks sought to secure liquidity and attract major depositors. Larger institutions may be better placed to absorb the cost of high deposit rates, while smaller banks with thinner margins could be more exposed to sudden liquidity shocks.

Domestic competition is being compounded by wider macroeconomic change, including Ethiopia’s transition to a market-determined foreign-exchange regime. The depreciation of the birr has raised import costs and increased pressure on bank customers with foreign-currency needs or import-dependent operations.

The NBE has reduced the foreign-exchange transaction commission cap to 1.5% and lowered the mandatory exporter foreign-exchange surrender requirement from 50% to 30%. However, foreign-exchange shortages and structural trade deficits continue to affect the wider economy.

Analysts say well-capitalised corporate entities may continue to view high-yield deposits and speculative investments as ways to hedge against inflation and currency depreciation. This creates incentives for the type of deposit practices the NBE is now seeking to restrain.

Architecture in motion

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Architecture in motion

For Bezawit Tibebu, fashion is not simply about clothing. It is a way of translating ideas, materials and the visual identity of Addis Ababa into forms that can move with the body. Trained in Architecture and Urban Planning, the founder and Creative Director of Tibebu Collection has drawn on her understanding of structure, space, proportion and material to develop a distinctive design language rooted in Ethiopian craftsmanship and contemporary expression.

After completing her studies, Bezawit chose to pursue a childhood ambition of working in the creative-design industry. She established her business shortly after graduation and has since built a label that places Ethiopian handwoven textiles at the centre of modern, experimental fashion.

Her Addis Raw collection reflects that vision. Inspired by the city’s layered architecture, public spaces and changing urban character, the collection transforms familiar Addis Ababa landmarks into wearable art. Designs draw inspiration from sites including the Lion of Judah, the Mayor’s Office in Piassa, the Commercial Bank of Ethiopia, the Bedelu Building and Meskel Square. Rather than reproducing buildings literally, Bezawit reinterprets their lines, proportions, shapes and visual rhythms through garments and accessories.

At the heart of her work is what she calls “moving architecture”: the idea that structures usually experienced as fixed can be reimagined as clothing that moves, interacts and becomes part of everyday life. Her designs bring together architectural discipline with the comfort, movement and individuality required of fashion.

Bezawit’s broader ambition goes beyond a single collection. Through collaboration with local weavers, tailors, photographers, filmmakers, models, stylists and other creative professionals, she hopes to show that Ethiopian textiles and cultural references can exist confidently within contemporary global fashion. In this interview with Capital, she discusses the journey from architecture to fashion, the inspiration behind Addis Raw, the potential of Ethiopia’s creative industries and her vision for Addis Ababa as a centre of design and cultural innovation. Excerpts;

Capital: How did your background in architecture influence your decision to pursue fashion design?

Bezawit Tibebu: My background in architecture gave me a different way of looking at design. Architecture taught me to think about structure, proportion, material, space and how people experience what we create. I have always been drawn to creative work, and after graduating in Architecture and Urban Planning, I explored different creative fields before fashion became the direction I wanted to pursue more seriously. What connected architecture and fashion for me was the design process. Both allow you to take an idea and translate it into something people can experience. However, I don’t see architecture as the essence of Tibebu Collection. It is one of the creative influences that shaped how I approach design.

Capital: What architectural features of Addis Ababa inspired the Addis Raw collection?

Bezawit: Addis Ababa itself was the inspiration. It is a city with so many layers. Different architectural periods, materials, colors, textures and ways of life existing alongside one another. I was particularly interested in the geometric forms, strong lines, proportions and distinctive silhouettes found in some of the city’s buildings and public spaces. The idea behind Addis Raw was not simply to reproduce buildings as clothing, but to interpret the visual language of the city and translate it into fashion.

Capital: How did you translate elements such as lines, structures, proportions and geometric forms into clothing?

Bezawit: I approached the garments almost as architectural compositions. Lines became seams and paneling, geometric forms influenced silhouettes and accessories, while proportions helped determine how different parts of the garments interacted with the body. At the same time, clothing has to move. So I had to take these structured ideas and soften or adapt them to the human form. The result was a balance between strong architectural references and garments that still feel like fashion rather than miniature buildings.

Capital: Which Addis Ababa buildings or urban spaces had the strongest influence on the collection, and why?

Bezawit: The idea actually began while I was studying architecture. I would look at different buildings and often wonder, what would this building look like if it could take another form instead of remaining static? . That question eventually led me to the concept “The Moving Architecture” the idea of taking architecture beyond a fixed physical structure and translating it into something that can move, interact and be experienced on the human body. I developed designs inspired by multiple buildings and urban spaces in Addis Ababa during that time, and I am slowly bringing them to life through different collections because producing these designs is a very detailed and challenging process. For the first release of the Addis Raw collection, I featured five designs inspired by the Lion of Judah (Beherawi), the Mayor’s Office (Piassa), the Commercial Bank of Ethiopia (Beherawi), the Bedelu Building (Beherawi), and Meskel Square. Each has its own architectural character and place within the city, and I wanted to reinterpret those identities through clothing rather than simply reproduce their physical appearance. For me, Addis Raw is therefore not only about the buildings themselves. It is about imagining how the architecture of the city could move, evolve and become part of something we can wear.

Capital: How do you balance architectural structure with the movement, comfort and practicality required in fashion?

Bezawit: That balance is one of the most important parts of the design process. A garment can look beautiful, but it ultimately has to work on a human body. I use structure where it adds character, but I also consider movement, weight, fabric behavior and how the garment will actually be worn. Ethiopian handwoven textiles can have their own structure and character, so understanding the material is just as important as understanding the design.

Capital: What role do Ethiopian handwoven textiles play in the Tibebu Collection?

Bezawit: It’s at the heart of what I do. My relationship with Ethiopian handwoven textiles became much stronger when I started researching local weavers and looking for materials that genuinely represented where I come from. I love the fact that the textiles carry history and craftsmanship, but I don’t want them to be confined to traditional clothing. I want to show that Ethiopian woven fabrics can be part of contemporary fashion, from everyday pieces to more experimental and high fashion designs.

Capital: How do you work with local weavers, artisans and producers in developing your designs?

Bezawit: The process is very collaborative. I work directly with weavers and other local producers, discussing the type of fabric, colors, patterns and technical requirements needed for a design. Sometimes the material itself inspires the design, and other times I have a concept first and work with the artisan to find a way to achieve it. That relationship is important because the people producing these materials are not simply suppliers. Their knowledge and craftsmanship are part of the creative process.

Capital: What message do you want audiences to take from presenting Addis Ababa’s architecture as wearable art?

Bezawit: I want people to look at Addis Ababa differently. We walk past buildings and spaces every day without necessarily thinking about their design language or the stories they represent. With Addis Raw, I wanted to turn something familiar into something unexpected. It is a way of saying that our city, our architecture and our everyday environment can be sources of contemporary artistic inspiration. We don’t always have to look outside Ethiopia for ideas.

Capital: How do you respond to the perception that Ethiopian fashion is mainly traditional rather than contemporary and experimental?

Bezawit: I think tradition and contemporary design can co-exist. Ethiopian fashion has an incredibly rich foundation, but that doesn’t mean we have to reproduce the past exactly as it was. For me, the question is: what can we create from what we already have? Ethiopian textiles, craftsmanship and cultural references can be interpreted through modern silhouettes, international design influences, new technologies and different creative disciplines. That is where experimentation becomes exciting.

Capital: What challenges do Ethiopian designers face when producing high-end fashion locally and presenting it to international markets?

Bezawit: There are challenges throughout the production chain. Access to consistent raw materials, specialized equipment, skilled production, quality control, financing and larger-scale manufacturing can all be difficult. There is also the challenge of producing locally while meeting the standards and quantities expected by international markets. But these challenges also highlight where investment and development are needed. If the industry is supported across the entire value chain from textiles and production to marketing and export we can build much stronger fashion businesses.

Capital: How do you ensure that the use of Ethiopian cultural elements remains authentic while still appealing to global audiences?

Bezawit: For me, authenticity begins with understanding where the material or cultural reference comes from and respecting the people and processes behind it. I don’t want to use Ethiopian elements simply because they look visually interesting. At the same time, authenticity doesn’t mean avoiding outside influences. I am inspired by fashion from around the world, and I believe Ethiopian design can have an international language while still being rooted in its own identity. The goal is not to choose between Ethiopian and global it is to bring them both together.

Capital: In what ways can fashion help promote Addis Ababa as a center of creativity, design and cultural innovation?

Bezawit: Fashion can tell a city’s story in a very immediate way. It brings together textiles, music, photography, film, performance, architecture, manufacturing and events, so it naturally creates opportunities for different creative disciplines to work together. Projects such as Addis Raw allow us to present Addis Ababa not only as a place with history and culture, but as a city where contemporary ideas are being created. I think there is enormous potential for the city to become known for its creative energy.

Capital: What opportunities do you see for Ethiopia’s textile and fashion industries to expand internationally?

Bezawit: There is significant potential because Ethiopia already has important foundations: skilled artisans, distinctive textiles, cultural heritage and a growing community of designers and creatives. The opportunity is to develop these strengths into a more connected industry. Better production infrastructure, access to finance, training, international partnerships, export systems and stronger platforms for Ethiopian designers could help local brands reach wider markets while creating more value within Ethiopia.

Capital: How does the Tibebu Collection contribute to creating opportunities for local artisans and other professionals in the creative sector?

Bezawit: Tibebu Collection is built around local production, so creating opportunities for artisans is part of the brand’s foundation. We work with weavers, tailors and other local professionals, and as the brand grows, I want that network to grow with it. I also see fashion as an ecosystem rather than something created by a designer alone. A collection can involve photographers, filmmakers, musicians, models, stylists, event producers, graphic designers and many others. Through our collections, events and storytelling, I want Tibebu to create space for these different talents while showing what can be achieved when local creative industries work together.

IMF revamps financial-sector assessments as Africa faces new digital and debt risks

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IMF revamps financial-sector assessments as Africa faces new digital and debt risks

The International Monetary Fund has approved reforms to its Financial Sector Assessment Program (FSAP), a move that could have significant implications for African economies facing rising public debt, rapid digitalisation, expanding non-bank finance and growing exposure to cyber and climate-related risks.

The IMF Executive Board concluded its periodic review of the programme on September 3, reaffirming the FSAP as a central tool for monitoring financial stability and guiding policy reforms. The review comes as financial systems worldwide confront a more complex risk environment shaped by the increased role of non-bank financial institutions, digital financial services, artificial intelligence, crypto assets, cyber threats and climate shocks.

For African countries, many of which are working to deepen financial inclusion while safeguarding still-developing banking and capital-market systems, the reforms could lead to more tailored assessments of domestic risks and stronger links between IMF recommendations, policy surveillance and technical assistance.

The FSAP provides detailed examinations of a country’s financial sector, including banks, insurers, capital markets, payment systems, regulatory agencies and crisis-management arrangements. In emerging and developing economies, the IMF generally conducts the assessments jointly with the World Bank. In advanced economies, the IMF usually leads the process independently.

Since the programme was launched in 1999, the Fund has completed 416 assessments in 161 member countries, covering jurisdictions that account for nearly all global financial assets.

The IMF said the latest review reflects the rapid changes affecting financial systems across the world. Directors noted that the growing interconnection between banks, non-bank financial institutions and financial-market infrastructure requires a more system-wide approach to risk assessment.

This is particularly relevant for Africa, where traditional banking continues to expand alongside mobile money platforms, fintech companies, digital lenders, microfinance institutions, pension funds and other non-bank financial service providers. These developments have widened access to payments, savings, credit and insurance, but they have also created regulatory and supervisory challenges.

The rapid growth of mobile financial services in many African countries has made payment systems and digital infrastructure increasingly important to the stability of the wider financial sector. Operational disruptions, cyberattacks, fraud, data breaches or failures in major payment platforms could have broader economic effects, especially in countries where mobile money and digital payments are widely used by households and small businesses.

The Fund said risks related to digitalisation, artificial intelligence, crypto assets and stablecoins will receive greater attention under the revised programme. Climate risks will also remain a priority, an issue of growing importance for African economies vulnerable to droughts, floods, food insecurity and other climate shocks that can affect agricultural incomes, inflation, bank loan performance and public finances.

Under the reforms, the FSAP will adopt a more risk-based and modular approach. The scope of individual assessments will be shaped by stronger initial diagnostics intended to identify the most material vulnerabilities in each country.

The programme is structured around three areas: financial-sector risk analysis; financial stability policy frameworks; and the ability of authorities to manage and resolve financial crises. The IMF said future assessments would place greater emphasis on system-wide and emerging risks where appropriate, while tailoring coverage to national circumstances.

For African economies, this could mean assessments more closely focused on issues such as sovereign-bank links, foreign-currency pressures, high public debt, limited fiscal space, weak asset quality, financial inclusion, fintech supervision, climate-related credit risks and the resilience of payment infrastructure.

However, IMF Executive Directors cautioned that expanding the programme’s coverage should not displace core analysis of banking-sector stability. They also stressed the importance of clear standards, transparent prioritisation and early discussions with national authorities to ensure that assessments remain credible and are applied even-handedly across countries.

The Fund said the reforms are intended to make the programme more agile and allow it to respond more quickly to emerging risks. The approach is also expected to help preserve the programme’s global nature by balancing mandatory assessments of systemically important financial sectors with voluntary assessments requested by other member countries.

A key feature of the revised approach is closer integration between FSAP findings, the IMF’s regular Article IV consultations and capacity-development work.

Article IV consultations are the IMF’s routine assessments of a member country’s economic and financial policies. By linking FSAP recommendations more directly to these consultations, the Fund aims to ensure that financial-sector vulnerabilities identified during an assessment remain part of ongoing discussions with governments and regulators.

The IMF also said recommendations would be better prioritised, sequenced and made more practical for authorities. This is particularly important for low-income and developing economies, where implementation capacity may be constrained by staffing shortages, institutional gaps, limited data and competing policy priorities.

Directors supported allowing longer implementation periods when necessary, recognising that some reforms—such as upgrading banking supervision, strengthening resolution frameworks, improving cyber resilience or building data systems—require sustained investment and technical expertise.

For African regulators, the revised programme could therefore provide a clearer framework for sequencing reforms and mobilising support from the IMF, World Bank and other development partners.

The review also updated the methodology used to identify jurisdictions with Systemically Important Financial Sectors, known as SIFS. Countries designated as having systemically important financial sectors are subject to mandatory financial stability assessments as part of the IMF’s surveillance process.

IMF directors supported adding an element of staff judgment to account for systemically important financial-market infrastructure and gaps in cross-border data. They said the use of such judgment must be evidence-based, even-handed and periodically reviewed by the Executive Board.

Several directors called for greater consideration of regional linkages and transmission channels. That issue is especially relevant in Africa, where cross-border banking groups, regional payment systems, trade ties and shared currency arrangements can transmit financial stress from one country to another.

Financial instability in a major regional economy can affect neighbouring states through bank subsidiaries, trade finance, remittances, capital flows and exchange-rate pressures. The Fund said the reformed FSAP would seek to account more effectively for such evolving vulnerabilities.

The IMF also plans to improve transparency by publishing more information about its analytical methods and technical manuals, expanding use of its online database of published FSAP materials, and developing a communication strategy for mandatory assessments.

The Executive Board supported greater use of artificial intelligence to improve the efficiency of FSAP work, but stressed that any use of AI must be subject to strong safeguards for validation, accountability, data protection and confidentiality.

The Fund’s emphasis on AI reflects the technology’s increasing role in finance, where it is being used for fraud detection, credit scoring, customer service, compliance and risk management. Yet African policymakers face a dual challenge: harnessing AI and digital finance to expand inclusion while ensuring that new technologies do not expose consumers, financial institutions or public systems to unmanageable risks.

The IMF said the reforms are intended to keep the FSAP fit for purpose as financial systems become more interconnected, technology-driven and exposed to new forms of stress.

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