Revue - Les Cahiers de l'Arbitrage N°2 - 2023 - 200

AFRICA SPECIAL ISSUE
Meanwhile, although the number of banks operating in sub-Saharan Africa
has increased exponentially, their size, resilience and the quality of their assets
leave room for considerable growth still. A predictable path ahead, therefore, is
intensifying consolidation of smaller-sized banks and external growth across the
banking sector. More merger & acquisition types of commercial transactions in
the banking industry will inevitably contribute to an increase in disputes involving
banks acting in their role as commercial parties to such transactions, not as
providers of banking services.
Another definite trend is the fact that African regional banks are becoming
essential participants in the financing of the infrastructure, energy, and public
service projects, all crucial to sustainable economic growth on the continent.
These sectors and types of projects regularly produce arbitration cases and are
among the limited areas in which arbitration is gradually finding its foothold in
the banking world, which has historically preferred commercial litigation instead.
This article will first outline the key trends that have emerged in the African
banking sector over the past twenty years and then consider the resulting
opportunities for international arbitration.
I. Growth, disruption, and consolidation
in the sub-Saharan Africa banking sector
A. The emergence of private banks and pan-African banking groups
The acceleration of economic growth in sub-Saharan Africa has been
accompanied by an expansion of the financial services industry. Following
various legislative acts in the 1990's in several countries in sub-Saharan Africa,
the banking industry gradually moved away from traditional State-owned banks to
privately-owned banks. 2
This liberalisation of the banking sector in turn attracted
international banks that either acquired local banks or established local subsidiaries.
As a result, over the last twenty years, many of the pre-existing State-owned banks
have simply ceased to exist.
The financial crisis of 2007-2010 and the European debt crisis of 2010-2012
forced US and European banks to refocus on their core activities and markets
outside of Africa. The gradual pullback of international banks incited local banks
in Africa, in an opposite movement, to expand their activities beyond national
borders. African banks such as South Africa's Standard Bank Group, Absa Group and
FirstRand, Togo's Ecobank Transnational Incorporated or Nigeria's Access Bank and
Zenith Bank expanded their footprint into the region, initially by participating in the
financing of extractive and construction industries, and subsequently, by establishing
local subsidiaries. These banks today have a combined presence in 36 of the 46
2. International Monetary Fund - African Department, Evolving Banking Trends in subSaharan
Africa, Key Features and Challenges, Mauro Mecagni, Daniella Marchattini and Rodolfo
Maino, September 2015, pp. 5-6, available at (https://www.imf.org/external/pubs/ft/dp/2015/
afr1508.pdf).
474
The Paris Journal of International Arbitration 2023‑2

https://www.imf.org/external/pubs/ft/dp/2015/afr1508.pdf https://www.imf.org/external/pubs/ft/dp/2015/afr1508.pdf

Revue - Les Cahiers de l'Arbitrage N°2 - 2023

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