By Bernard Yaw ASHIADEY & Ebenezer Chike Adjei NJOKU
Jean-Eric Matunga, Head of Specialised Finance, Rawbank, a leading financial institution in the Democratic Republic of Congo (DRC), has reiterated calls a continent-wide synchronization of banking regulations to foster greater economic integration and compliance with global financial standards.
This recommendation was made during a recent Compliance Forum in Dakar, Senegal, organised by the African Export-Import Bank (Afreximbank), in partnership with the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), addressing the fragmented regulatory landscape across Africa’s 55 distinct markets.
“We need to have a platform where we synchronize all these efforts so that it serves the entire continent,” the Mr. Matunga executive stated. He argued that the time has come for African nations to harmonize their laws and regulations, particularly in light of initiatives such as the African Continental Free Trade Area (AfCFTA) and proposals for an African passport.
He was speaking during the third panel on Day 1 under the theme ‘A Business Perspective on UBO Improvements and its Impact on Business’. The objective was to discuss the business implications of UBO improvements. The session examined improvements and their impact on commercial banking activities in terms of trade facilitation; and discussed the added value for companies.
Hannane Ferdjani, Journalist, Founder of Beyond The Noise Africa, moderated the session and other panellists were Linus Kumi, Head, Corporate Banking, GCB Bank Plc; El Hadji Malick Gueye, Directeur Général, Wave Digital Finance; Gualter Goncalves, Compliance Director, Vista Bank Mozambique; and Pattison Boleigha, Managing Director, Pattison Consulting Limited.
The banker drew parallels with the European Union, suggesting that Africa should “replicate the same framework” to facilitate intra-continental trade and financial transactions. He emphasized the practical implications of such integration, using examples of potential trade in oil and electrical components between Nigeria and the DRC.
Current disparities in Know Your Customer (KYC) procedures and information sharing between banks in different African countries present significant obstacles to such trade. “If we have to buy oil from Nigeria, the bank in DRC and the bank in Nigeria should be able to identify who is buying it and who is the man sitting behind the company buying this oil,” the executive explained.
While some regional economic communities, such as the West African Economic and Monetary Union (WAEMU) and the Economic and Monetary Community of Central Africa (CEMAC), share regulators and similar regulations, the majority of African markets follow independent regulatory paths. This fragmentation complicates efforts to establish continent-wide financial norms and practices.
The push for regulatory synchronization comes as individual African nations grapple with compliance to international financial standards. The Financial Action Task Force (FATF), an intergovernmental organization that sets global standards for combating money laundering and terrorist financing, has placed several African countries on its “grey list” of jurisdictions with strategic deficiencies in their anti-money laundering and counter-terrorist financing (AML/CFT) regimes.
The DRC is among the nations currently on this grey list. “Both the government and the private sectors, mainly private banks, are working end-to-end to take the country out of that list,” the Rawbank executive stated. He noted that compliance efforts are ongoing, describing it as “a journey” rather than a one-time achievement.
The DRC’s situation is complicated by the relatively young age of its current banking system. Following a series of bank failures in the 1990s that eroded public trust, the country’s banking sector has been rebuilt over the past two decades. “I can say the banking system we have today is less than 30 years old,” Mr. Matunga revealed.
Despite these challenges, the Rawbank representative expressed optimism about the future of African financial integration. He believes that discussions at forums like the one he attended are planting seeds for future cooperation, stating, “We believe that this has… this seed has fallen to very fertile ground and something should come out of this.”
The call for greater synchronization of banking regulations across Africa comes at a time when the continent is seeking to boost intra-African trade and economic cooperation. However, the path to such integration remains complex, requiring careful navigation of national interests, regulatory disparities, and ongoing compliance challenges with global financial standards.
As African nations continue to work towards stronger AML/CFT regimes and greater economic integration, the banking sector will likely play a crucial role in facilitating or hindering progress.
The proposed synchronization of regulations could potentially streamline cross-border transactions, enhance compliance with international standards, and foster a more cohesive African financial ecosystem.
However, implementing such wide-ranging regulatory changes would require significant political will and cooperation among African nations. It would also necessitate substantial investments in infrastructure, technology, and training to ensure consistent application of harmonized regulations across diverse economic and political landscapes.
The coming years may prove pivotal in determining whether the vision of a more financially integrated Africa can be realized. As discussions continue, policymakers, financial institutions, and regulatory bodies across the continent will need to weigh the potential benefits of integration against the challenges of implementation and the preservation of national economic sovereignty, Mr. Matunga added.
The Afreximbank Compliance Forum
The Afreximbank Compliance Forum, which was organised in partnership with the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) was sponsored by some banks including Vista Bank, GCB Bank, Wave, Rawbank, SUNU Group and compliance system providers such as Lexus Nexis, Elucidate, Finanstra and Llyod’s List Intelligence, Consortix, and Vneuron.
The Forum focused on the Financial Action Task Force’s (FATF) requirements for identifying Ultimate Beneficial Owners (UBOs) and their far-reaching implications for trade facilitation.
The FATF, an intergovernmental organisation, sets international standards to prevent money laundering, terrorist financing, and other threats to the integrity of the global financial system. One of its critical mandates is to identify and verify UBOs to ensure transparency and accountability in financial transactions.
Additionally, the Forum explored the transformative role of Artificial Intelligence (AI) in compliance processes, address strategies for African countries to make the necessary reforms to be removed from the FATF’s grey list and showcase the latest compliance technologies.
>>>the coverage of the forum in Dakar, Senegal was made possible by the kind courtesy of Ecobank Ghana, Fidelity Bank Ghana, Stanbic Bank and OmniBSIC Bank Ghana. We at the B&FT appreciate their support. Thank you
