Banks across East Africa are growing increasingly uneasy about policy and regulatory uncertainty, with more than two-thirds warning that unpredictable rule changes are becoming a material risk to growth, according to a new regional survey of senior banking executives
- •The 2025 Eastern Africa Banking Survey, conducted by PwC among banks in Kenya, Uganda, Tanzania, Rwanda and Mauritius, shows that 68% of respondents are either “concerned” or “extremely concerned” about the pace and unpredictability of regulatory and policy shifts.
- •The findings come as regulators across the region tighten oversight, raise capital requirements and roll out new rules covering areas such as cybersecurity, consumer protection, tax compliance and environmental, social and governance (ESG) reporting.
- •Sudden shifts in policy, the survey warns, often prompt banks to tighten credit standards or delay lending decisions, limiting access to finance for businesses and households.
“Institutions are being forced to constantly recalibrate systems, retrain staff and reallocate resources to stay compliant,” the survey notes, adding that compliance investments are increasingly competing with growth and innovation spending
In Kenya, banks are adjusting to higher minimum core capital thresholds, with the Central Bank of Kenya raising the bar to KSh3 billion and setting a path toward KSh10 billion by 2029.
While these reforms are aimed at strengthening financial stability, bankers say the frequency and timing of policy changes complicate long-term planning and raise operating costs.
The uncertainty is not confined to banking regulation alone. Executives also pointed to frequent tax policy changes, evolving reporting requirements and sector-specific rules as sources of risk, particularly for lending to small and medium-sized enterprises (SMEs).
Beyond the banking halls, the knock-on effects could be felt across the wider economy. Regulatory ambiguity can distort pricing, increase borrowing costs and heighten the risk of non-performing loans as borrowers struggle to adjust to new compliance demands.
Many institutions are investing in agile compliance systems, stronger risk management frameworks and digital tools to improve their ability to respond quickly to regulatory change. Others are stepping up engagement with regulators and building internal capacity in areas such as data governance, cybersecurity and ESG reporting.
