Journal of Banking Regulation

, Volume 20, Issue 3, pp 274–285 | Cite as

Growing cross-border banking in Sub-Saharan Africa and the need for a regional centralized regulatory authority

  • Franklin N. NgwuEmail author
  • Chris Ogbechie
  • Kalu Ojah
Original Article


Though cross-border banking, stimulated by globalization and financial integration in the recent past, is said to offer growth-enhancing benefits such as competition and efficiency, financial inclusion, and diversification of risk, these benefits seem not to have materialized markedly in Sub-Saharan Africa (SSA), an outcome attributable to efficiency barriers, currency differences, political instability, linguistic divisions, weak legal environment, and lack of regulatory coordination. However, given that many have flagged heterogeneity of regulatory architecture, inadequate institutional infrastructure, and other requisite environmental factors as more pivotal reasons for the delayed realization of cross-border banking’s many benefits in SSA, we invoke lessons from the Euro area’s successful experience in cross-border banking, to propose effective ways of harvesting its benefits in SSA. This paper, therefore, advances the initiation of a centralized regulatory authority as a potentially efficacious way of extracting fuller harvests from cross-border banking in SSA. More specifically, lessons from the Euro area suggest that strong collaboration among supervisors across SSA should be encouraged as to foster the establishment of a centralized regulatory authority for enabling successful cross-border banking and other financial services. Furthermore, the following regional initiatives can serve as robust antecedents of the centralized regulatory authority: single or more integrated regional markets, a regional deposit insurance scheme, and 1–2 dominant convertible currencies that can minimize exchange rate risks.


Cross-border banking Financial sector regulation Regulatory policies and structures Financial stability Sub-saharan Africa 


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Copyright information

© Springer Nature Limited 2018

Authors and Affiliations

  1. 1.Strategy, Finance and Risk Management, Lagos Business SchoolPan-Atlantic UniversityLagosNigeria
  2. 2.Wits Business SchoolUniversity of the WitwatersrandJohannesburgSouth Africa

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