By Ngozi Onyeakusi– The outlook for Nigeria’s banking sector and for banks in Africa will remain negative into 2021 amid difficult operating conditions and sovereign pressures straining banks’ credit profiles, Moody’s Investors Service stated in its recent report. Specifically, it predicted that South African and Nigerian banks would face acute macro challenges, while loan quality and liquidity would be the main issues for Angolan and Tunisian banks, respectively. On the other hand, it stated that East African and Francophone West African banks are better placed than Central African banks to weather the pandemic, given their more resilient economies, with Egyptian banks facing the least impact. Overall, banks’ financial stability in the region would be broadly maintained. “Stable local currency deposit funding, high liquidity in local currency, good capital buffers, and gradual improvements in risk management will help to contain banks’ risk over the next 12 to 18 month,” Moody’s added. According to the rating agency, loan quality, profitability, and foreign currency liquidity would be the main stress points next year for banks in the continent, although stable funding and capital could limit the impact.