The study examined the impact of financial development and foreign direct investment on banking sector performance in African with emphasis on countries with stock exchange markets for the period 1996 to 2016. The study adopted dynamic panel data generalized method of moment estimation model to make robust statistic inference. The study concluded that financial development and foreign direct investment have negative impact on banking sector performance in the samples used. The study recommends governments’ effectiveness in the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies to create an enabling environment for the banking sector to thrive.