Ezulwini- Southern African central banks are stepping up their collective defenses to shield the regional financial sector from rising cyber threats, artificial intelligence vulnerabilities, and climate-related shocks.
Speaking during the opening of the Southern African Development Community (SADC) Committee of Central Bank Governors (CCBG) Subcommittee meeting on Banking Supervision and Financial Stability, Central Bank of Eswatini (CBE) Governor Dr. Phil Mnisi declared that the focus has officially shifted from policy drafting to active regional enforcement. Dr. Mnisi highlighted that while regional banks remain sound and well-capitalized despite persistent global macroeconomic pressures and tight external financing conditions, the deep interconnectivity of the regional banking ecosystem means single-country data is no longer sufficient to guarantee financial stability.
The meeting celebrated a major regional milestone with the finalization and approval of key regional frameworks covering cybersecurity, climate-related financial risk, and cross-border crisis management. Director of Prudential Supervision at the Bank of Zambia, Lyness Phiri Mambo, speaking in her capacity as Chairperson of the subcommittee, commended the dedicated working groups led by Botswana and Zimbabwe for their leadership in developing these benchmark frameworks. She emphasized that as digital financial services expand, regional responses must remain proactive, coordinated, and robust.
A major focus of the deliberations centered on the rapid expansion of digital financial services, mobile money, and artificial intelligence across the region. While these innovations have drastically expanded financial access for citizens, regulators warned that they have introduced complex operational, third-party, and cyber risks.
Supervisors were explicitly urged by Governor Mnisi to extend their oversight beyond traditional banking halls to cover critical outsourced infrastructure such as cloud hosting providers and payment processors. Furthermore, the increasing adoption of artificial intelligence in credit scoring, fraud detection, and customer service has raised urgent questions regarding algorithm explainability, data governance, and fair customer treatment, requiring institutions to address these supervisory blind spots and modernize their technical methods.
On the domestic front, Mnisi highlighted major strides taken by the Central Bank of Eswatini in strengthening the country’s financial safety net and sustainability agenda. The CBE has finalized the Eswatini Green Finance Taxonomy to establish clear market standards for sustainable investments, alongside drafting Climate Risk Management and Recovery Planning Guidelines now heading for industry consultation.
To protect depositors and preserve financial stability, Eswatini has established a dedicated Resolution Function within its Financial Stability Unit to manage distressed institutions, while preparatory work for Eswatini’s Deposit Protection Fund is well underway with its pilot phase currently running ahead of full operationalization expected within the current financial year.
Recognizing the dominant role of major cross-border banking groups operating across SADC, delegates commended the South African Reserve Bank and its Prudential Authority for their leadership as home supervisor to several regional banking entities. Looking ahead under the upcoming 2026–2030 CCBG Strategy, Phiri Mambo noted that the subcommittee will focus on defining shared priorities, including forward-looking tools such as a Regional Financial Stability Index, while conducting crisis simulation exercises to test cross-border resolution frameworks before an actual market crisis strikes.
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