Financial ratings agency Fitch Ratings gives African banks a stable outlook, as business conditions and the pandemic limit the recovery of the continent's financial sector.

"Fitch Ratings considers the outlook for the African banking sector in 2022 to be neutral, with business conditions fraught with uncertainty and risks associated with the covid-19 pandemic limiting recovery," reads the note accompanying the release of the report quoted by Lusa.

The report, which includes only the Portuguese-speaking Banco Angolano de Investimentos, with a CCC rating, anticipates "a slight increase in lending" in a context of "relatively high commodity prices and favorable external financing conditions.

Analysts at Fitch Ratings, the financial ratings agency owned by the same owners of the consulting firm Fitch Solutions, point out that "there is significant uncertainty in Africa, which is particularly at risk from new variants of covid-19, against a backdrop of a low vaccination rate and little budgetary room for maneuver by governments."

If these risks materialize, "the outlook could change dramatically," the analysts warn.

"Banks are likely to make mistakes in their quest for growth with the difficult operating conditions, which are characterized by challenges and uncertainties," said the head of the African banks department at Fitch, Mahin Dissanayake.

"The pace of downgrades in the rating has slowed significantly in 2021; in the absence of materialization of downside risks, we expect this trend to continue into 2022," he added.

Fitch Ratings has placed 56% of the banks analyzed on a negative Outlook, which compares to 66% recorded in December last year.

"The revision to Stable of the Outlook during 2021 reflects the view that the headwinds have died down in some markets and that there is a degree of tolerance for slight downside risks to current ratings," he concluded.