Sub-Saharan banking systems have been resilient to the episode of the global turmoil, the resident representative of the International Monetary Fund (IMF) declared on Thursday. Meshack Tunee Tjirongo was speaking at the Kairaba Beach Hotel in Kololi during a one-day outreach forum to present the recent reports on the Regional Economic Outlook (REO) for Sub-Saharan Africa (SSA).

Convened by the International Monetary Fund (IMF) in conjunction with the Bankers Association of the Gambia (BAG), the event provided a platform to discuss on the REO, which is a flagship publication of the IMF, and provides cross-country analysis and spillover effects. The latest REO reports cover topics such as sustaining growth amid global uncertainty, impact of global financial stress on SSA financial system, SSA’s natural resources exporters, as well as recent performance and policy challenges.

The IMF rep said that that the vulnerabilities to ongoing European Financial stress are moderate in most SSA countries, stressing that there is no room for complacency. “We have organised this presentation along with four main messages namely; expansion of inadequately supervised, Pan African banking groups, high credit in some countries albeit often from low base, and some policies can enhance financial sector resiliency. There have been three of these episodes starting from the one associated with the collapse of the Leman Brothers Investment Bank in 2008, followed later by the episode in 2010 and 2011 related to deteriorating conditions in Europe,” he added.

He explained that although these episodes gave rise to stress on SSA banking systems, mainly on the liquidity side, only one country suffered a banking crisis. The IMF resident rep also stated that most banking systems were not materially affected judging from the evolution of their financial soundness.

Commenting on moderate vulnerabilities, Tjirongo said that capital controls remain pervasive throughout the region, with relatively few exceptions. He observed that low cross border exposures may not come as a surprise to many observers when one considers that capital controls are still pervasive in many SSA countries. Given this structures in banks in balance sheet, he stressed that it is not surprising that changes in banks’ foreign assets and liabilities were not that large during the global financial crisis.

“Although most SSA banking systems are relatively insulated from external financial development, it is possible that problems in one Pan African SSA bank spreads throughout the region. The aggressive expansion of Pan-African Banking groups in the absence of effective consolidated supervision could become a channel of contagion. Many SSA banking groups are operating subsidiaries across the region,” he added

On his part, the managing director of GTBank, Femi Omotoso stressed that whatever challenges in the environment, man always finds a way of overcoming those challenges. He expressed optimism that the forum will provide the participants with a greater understanding of their environment within which they exist, noting that the insight that will be gained from the deliberation will impact positively on their enterprises as stakeholders, their customers and the society at large.

He continued: “Going through the document, which is a flagship publication of the IMF, it’s noteworthy that despite the crisis in most economical regional economies today, SSA continues to record positive growth as our regional outlook grew by 5% last year and the projection in 2012 there will be a slight increaseas well.”

Omotosho said that although the economy is performing extremely well today, people must not lose sight of the threats exposed by the increasingly financial crisis, especially in the Euro Zone and the possibility of the rise in the prices of oil and oil products due to social unrest on the continent, and the world at large.