For decades, risk management in Africa was designed around national borders. Regulatory compliance, operational controls, and risk assessments were largely country-specific, reflecting fragmented markets and limited cross-border integration.
That model is becoming obsolete.
By 2026, cross-border risk is no longer the exception—it is the operating reality. Initiatives such as the African Continental Free Trade Area (AfCFTA) and the Pan-African Payment and Settlement System (PAPSS) are accelerating economic integration, reshaping how money, data, goods, and services move across the continent.
As integration deepens, risk no longer respects borders. And organizations that continue to manage risk through a purely local lens will find themselves exposed.
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The AfCFTA represents one of the most ambitious economic integration projects globally. Once fully implemented, it aims to create a single market across 54 countries, covering more than 1.4 billion people and a combined GDP exceeding USD 3 trillion.
But integration at this scale does not only reduce trade barriers—it amplifies risk interconnection.
Under AfCFTA, companies increasingly operate supply chains, distribution networks, and service models that span multiple jurisdictions with different regulatory maturity, enforcement capacity, and risk cultures. A disruption, compliance failure, or governance gap in one country can quickly cascade across borders.
The AfCFTA Secretariat has consistently emphasized the need for regulatory cooperation and harmonization to support this integration. For risk leaders, this means local compliance is no longer sufficient. Risk must be understood at regional and systemic levels.
Nowhere is this shift more visible than in payments. The Pan-African Payment and Settlement System enables instant cross-border payments in local currencies, reducing reliance on correspondent banking and foreign currencies. PAPSS is a foundational infrastructure for AfCFTA, designed to lower transaction costs and increase financial inclusion.
But real-time, cross-border payments also compress risk timelines.
Operational failures, fraud, cyber incidents, or sanctions breaches can propagate across multiple countries in seconds. Traditional controls designed for slower, bilateral payment systems struggle to keep pace with this velocity.
The African Export-Import Bank, which leads the implementation of PAPSS, has highlighted the system’s role in transforming intra-African trade and financial flows. As PAPSS adoption grows, institutions participating in the ecosystem are exposed not only to their own risk posture, but to the resilience and compliance maturity of the broader network.
One of the defining challenges of cross-border risk in Africa is regulatory fragmentation.
While AfCFTA promotes economic integration, regulatory frameworks remain largely national. AML, data protection, cyber resilience, consumer protection, and operational risk requirements vary significantly across jurisdictions. Enforcement intensity and supervisory expectations differ widely.
This creates a structural risk: integration outpaces regulatory harmonization.
Regional bodies and central banks are working to close this gap, but progress is uneven. In the meantime, organizations operating cross-border must navigate overlapping, and sometimes conflicting, regulatory obligations.
The African Union and regional economic communities have repeatedly acknowledged this challenge, emphasizing the need for coordinated supervision and information sharing. For risk management, this means that compliance must be designed for the highest common denominator, not the lowest local requirement.
As cross-border systems expand, the nature of incidents changes.
A fraud scheme exploiting payment rails in one country can rapidly impact institutions in others. A cyber vulnerability at a regional service provider can disrupt multiple markets simultaneously. A governance failure at a cross-border fintech can trigger regulatory action across several jurisdictions. Regulators are increasingly aware of this contagion effect.
Supervisory authorities are beginning to assess not only whether institutions comply locally, but whether they understand and manage cross-border dependencies and spillover risks. Institutions unable to demonstrate visibility across their regional operations may face heightened scrutiny.
Traditional risk management models assume clear boundaries: one regulator, one legal framework, one operating environment. That assumption no longer holds.
In a PAPSS- and AfCFTA-enabled environment, institutions operate within ecosystems, not silos. Risk ownership becomes shared, but accountability remains individual. A local control failure can trigger regional consequences, even if the institution complied with national requirements. This creates a dangerous illusion: believing that local compliance equals regional safety.
In 2026, regulators are increasingly challenging this assumption. They expect institutions to identify cross-border critical services, map dependencies, and test their ability to respond to regional disruptions—not just local ones.
Managing cross-border risk in 2026 requires a fundamental shift in mindset.
Organizations must move from country-by-country risk assessments to integrated regional risk views. This includes harmonized risk taxonomies, shared incident escalation protocols, and centralized oversight of critical functions that operate across borders.
Technology plays a key role, but governance is decisive. Risk, compliance, legal, and operations teams must collaborate across jurisdictions, with clear ownership and escalation pathways.
Without this coordination, speed becomes the enemy. And in cross-border systems, speed is unavoidable.
AfCFTA and PAPSS are transforming Africa’s economic landscape. They promise efficiency, inclusion, and growth. But they also redefine risk.
By 2026, cross-border risk is not a specialized concern for multinational institutions. It is the default operating condition for banks, fintechs, payment providers, and corporates across the continent.
Organizations that continue to manage risk as if borders still contained exposure will struggle. Those that adapt—by treating cross-border risk as a core strategic discipline—will be better positioned to operate safely in Africa’s integrated future.