RISK MANAGEMENT IN AFRICA'S FINANCIAL LANDSCAPE: A REVIEW

Abstract

This review paper examines the critical role of risk management in Africa's financial landscape. It sets out to achieve three primary objectives: to explore the historical development of the financial sector in Africa, review the literature on risk management in financial institutions, and evaluate the effectiveness of regulatory measures in ensuring financial stability. The study uncovers key findings that underscore the growing significance of effective risk management practices in African financial institutions. It highlights adopting advanced technologies and regulatory harmonization as pivotal factors shaping risk management approaches. Additionally, the research underscores the importance of sustainable finance and the integration of Environmental, Social, and Governance (ESG) factors into risk assessments. These findings emphasize that risk management not only ensures financial stability but also contributes to sustainable and responsible financial practices. The broader implications of this study extend to economic stability, investor confidence, and cross-border cooperation. Effective risk management practices mitigate financial risks and support the ongoing regional integration efforts in Africa, such as the African Continental Free Trade Area (AfCFTA). Ultimately, the study underscores that the future prosperity of African economies is closely tied to embracing evolving risk management practices, fostering a resilient financial landscape in the region. Keywords: Risk Management, Financial Institutions, Africa, Financial Stability, Regulatory Framework, Sustainable Finance, Regulatory Compliance, Cybersecurity, Crisis Management, Data Privacy.