Overview

This document is a statement by Professor Charles C. Soludo, Governor of the Central Bank of Nigeria, delivered at the African Bankers’ Forum (ABF) workshop on 'Creating a Continent-Wide Correspondent Banking Network in Africa,' organized by the African Export-Import Bank and the ABF, held at Bolingo Hotel & Towers in Abuja, Nigeria on January 26, 2005. The address emphasizes the timeliness and relevance of the workshop theme to Africa's economic revival and integration into the global economy. Soludo highlights the critical role of correspondent banking in facilitating funds transfer for trade and commerce, which enhances economic activities, generates employment, and promotes development. He notes that most African banks lack the capacity and infrastructure to perform these functions effectively due to their small size and deficient infrastructure. This led to Nigeria's banking sector reform, initiated on July 6, 2004, with key objectives including preventing systemic crises, creating a trustworthy banking system, making banks investor-friendly, enhancing transparency and governance, and reducing cost structures. The reform's main thrust is consolidation and recapitalization, raising minimum shareholders' funds from N2 billion (US$15 million) to N25 billion (US$190 million) by December 31, 2005. Soludo reports encouraging progress, with seven banks meeting the new requirement and many involved in mergers or acquisitions. He observes that correspondent banking in Africa has historically followed colonial trading lines, with limited intra-African correspondent relationships, and calls for enhancing payment, settlement, and clearing operations to support the continent's economic development.

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