Central Bank of Nigeria Governor Olayemi Cardoso has called for enhanced continental collaboration to address cross-border financial risks, emphasising the need for harmonised regulatory frameworks and information-sharing mechanisms across African economies. Speaking at a gathering of central bank governors and financial sector regulators, Cardoso highlighted the growing interconnectedness of African financial systems and the corresponding vulnerability to contagion effects, money laundering, and illicit financial flows. The appeal reflects a recognition that individual national efforts, however robust, are insufficient to secure financial stability in an increasingly integrated regional market.
The governor’s remarks come against the backdrop of rapid financial integration across the continent, driven by the African Continental Free Trade Area (AfCFTA), the expansion of pan-African banking groups, and the proliferation of cross-border digital payment platforms. While these developments promise to boost trade and investment, they also create channels through which financial shocks, fraud, and regulatory arbitrage can propagate. Cardoso’s call for collaboration underscores the urgency of building institutional frameworks that can keep pace with the speed of financial innovation and integration.
From a macro-stability perspective, cross-border financial risks take several forms. Currency volatility in one economy can spill over into neighbouring countries through trade and investment linkages. Weak anti-money laundering controls in one jurisdiction can create entry points for illicit flows that traverse multiple financial systems. Divergent regulatory standards can encourage regulatory arbitrage, where institutions operate in jurisdictions with the weakest oversight. Addressing these risks requires not only coordination among regulators but also political commitment to align national interests with continental stability.
Cardoso’s emphasis on information sharing is particularly significant. Many cross-border financial crimes and stability risks are detected only when patterns emerge across multiple jurisdictions, yet data-sharing arrangements remain underdeveloped in many parts of Africa. The absence of real-time information flows between financial intelligence units, central banks, and supervisory authorities creates blind spots that sophisticated actors can exploit. The governor’s call suggests a vision of a more connected regulatory architecture where suspicious transactions can be tracked across borders and emerging risks can be identified before they become systemic.
The AfCFTA’s digital trade protocol provides a potential framework for advancing this agenda. The protocol includes provisions on data governance, cross-border payments, and regulatory cooperation that could serve as building blocks for the kind of harmonised system Cardoso envisions. However, translating these provisions into operational reality requires sustained technical engagement, capacity building, and political will. Nigeria’s leadership in this process, given its position as the continent’s largest economy and a hub for financial services, could help set the pace for regional integration in financial regulation.
The Central Bank of Nigeria has already taken steps to strengthen its own regulatory framework, including enhanced oversight of banks’ foreign operations, stricter anti-money laundering compliance requirements, and efforts to unify the exchange rate and improve transparency in the foreign exchange market. Cardoso’s continental call extends this domestic reform agenda to the regional level, recognising that financial stability in Nigeria is increasingly dependent on stability across Africa. For Nigerian banks with operations in other countries, and for cross-border payment systems that connect Nigerian businesses to regional markets, a more harmonised regulatory environment reduces compliance costs and operational risks.
The governor’s appeal also addresses the challenge of de-risking, where global banks have reduced correspondent relationships with African financial institutions due to concerns about anti-money laundering and counter-terrorism financing controls. Stronger regional collaboration and harmonised standards could demonstrate to international counterparts that African financial systems are governed by robust, coherent frameworks, potentially reversing the trend of de-risking that has constrained trade finance and cross-border payments.
As African economies deepen their integration, the governance of cross-border financial risks will become increasingly central to the continent’s economic stability and growth prospects. Cardoso’s call for collaboration signals Nigeria’s readiness to play a leading role in building the institutional infrastructure needed to manage this new era of financial integration. The test will be whether the vision translates into sustained cooperation among central banks and regulators across the continent.
