Cardoso says cross-border payments too slow, costly for developing economies

…Edun flags rising debt, urges global financial system reform

…EMDEs’ policy room shrinks as risks mount

Olayemi Cardoso, governor, Central Bank of Nigeria (CBN) said on Thursday that cross-border payments remain too inefficient to support inclusive growth in developing economies, warning that high costs and settlement delays are shutting millions out of global trade and finance.

Speaking at the G-24 Technical Group Meetings in Abuja, Cardoso said payment systems now sit at the heart of global economic integration and financial stability, but remain structurally biased against emerging and developing markets.

“Today, cross-border payments remain too slow, too costly, and too fragmented, especially for developing economies,” Cardoso said. “With global remittance corridors costing over 6.0 percent, settlement lags of several days, and compliance burdens that exclude MSMEs, millions remain disconnected from global opportunity.”

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He argued that reforming cross-border payments is not merely a technical upgrade but a macroeconomic priority, as the channels through which capital, remittances and trade flow increasingly shape financial stability.

The G-24, or Group of 24, is an intergovernmental group of developing countries that coordinates on international monetary and development finance issues. Despite the name, it actually has 28 members today, including, include Algeria, Argentina, Brazil, Colombia, Côte d’Ivoire, Congo, Ecuador, Egypt, Ethiopia, Gabon, Ghana, Guatemala, Haiti, India, Iran, Kenya, Lebanon, Mexico, Morocco, Nigeria, Pakistan, Peru, the Philippines, South Africa, Sri Lanka, Syria, Trinidad and Tobago, and Venezuela.

For them, inefficiencies translate directly into higher foreign-exchange costs, fragmented settlement processes and barriers for small and medium-sized enterprises seeking to participate in global trade.

“At the heart of this transformation lies a simple, yet powerful truth: an economy cannot be more inclusive than its payment system,” Cardoso said, linking digital cross-border infrastructure as foundational to economic participation.

Digital innovation, he said, presents a historic opportunity to reduce costs, shorten settlement times, and expand access for households and MSMEs. He cited examples from India and Brazil to show that rapid adoption of interoperable platforms and instant payment systems can lower transaction costs and expand financial inclusion, offering lessons for other G-24 members.

According to the governor, Nigeria has acted on these lessons, modernizing its payment ecosystem, with the CBN launching the Payment System Vision 2028, a forward-looking initiative developed with industry stakeholders around five strategic priorities to boost innovation, system resilience, and financial inclusion.

In June 2025, the country also introduced the National Payment Stack, built on ISO 20022 messaging, to support multi-currency and cross-border transactions. Simplified KYC/AML rules for low-value cross-border payments and new diaspora account structures have further eased remittances and trade participation for SMEs.

As a result of these reforms, remittance inflows now average about $600 million a month, with authorities targeting $1 billion monthly in the near term, Cardoso said.

Beyond efficiency gains, he argued that digital cross-border systems could reshape global finance by enabling local-currency settlement, reducing dependence on reserve currencies and strengthening South-South integration.

Cardoso cautioned that digital innovation carries risks, including currency substitution, foreign-exchange volatility and regulatory fragmentation if private platforms and stablecoins expand unchecked.

“Without coordination, digital cross-border payments risk becoming fragmented across jurisdictions, entrenching dominant currencies and platforms, reducing interoperability, increasing costs and undermining the ability of Emerging Market and Developing Economies to safeguard monetary sovereignty,” he said, urging
central banks to shape the evolving architecture, balance innovation with stability as they pursue inclusive, job-rich growth across developing economies.

In his speech, Wale Edun, minister of finance and coordinating minister of the economy warned that mounting debt distress across emerging and developing economies is threatening growth and investment, urging sweeping reforms to the global financial architecture to prevent deeper fragmentation.

“Over a quarter of EMDEs have already lost access to international capital markets, while more than half of low-income countries are in or approaching debt distress,” Edun said at the G-24 Technical Group Meeting in Abuja. “This tightening financing environment threatens much-needed investments in health, education, infrastructure, and climate resilience.”

He said the global economy is entering what he described as an “Age of Competition,” marked by geopolitical rivalry, weakening multilateralism and tightening financial conditions that are squeezing vulnerable economies.

Deepening geoeconomic fragmentation — including tariffs, sanctions and investment restrictions — could cut global output by 2 percentage points and shrink trade by 2.3 percent, with disproportionate consequences for countries reliant on capital flows and trade integration. Africa, despite accounting for 17 percent of the world’s population, represents only 3 percent of global trade and 2.5 percent of global GDP, he noted, warning that further fragmentation could widen that imbalance.

Edun said the growing strain underscores the need to overhaul global financial structures. “The annual SDG financing gap has expanded to $4–5 trillion, highlighting the urgency of reforming global financial structures,” he said.

Under a section titled Reforming the Global Financial Architecture, Edun called for strengthening the International Monetary Fund’s global financial safety net, expanding concessional lending by multilateral development banks and revising capital adequacy rules. He also urged greater use of local-currency financing and support for regional development banks, saying “these reforms are essential to support countries that have lost access to international capital markets.”

Edun told the audience that the Nigerian government is pivoting away from heavy reliance on external borrowing toward an investment-led model anchored on domestic reforms and private capital mobilization.

The strategy, he said aims to lift medium-term growth to 7 percent and raise the investment-to-GDP ratio to at least 30 percent, while boosting tax revenues and improving fiscal resilience.

In her welcome address, Iyabo Masha, director and head of secretariat, G‑24, said Emerging Market and Developing Economies (EMDEs) are now navigating a world of “measured resilience but constrained ambition,” with high debt burdens, limited fiscal space, and muted growth threatening their development paths.

“For many EMDEs, the challenge is no longer simply to ‘recover,’ but to restore development trajectories, protect macroeconomic stability, and finance transformation in a world of higher volatility,” she told the meeting.

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Masha highlighted the strain on sovereign finances, noting that “public investment in many developing countries remains below the levels needed to achieve essential infrastructure and climate objectives,” as debt service increasingly consumes government revenues. External public debt reached $487 billion in 2023, with many nations dedicating a large share of export revenues to servicing obligations.

She warned that this fragility is worsened by “uneven financial conditions,” with EMDEs still facing high capital costs despite easing global financial markets, alongside risks from inflation shocks, trade fragmentation, debt distress, and human capital erosion.

Calling for medium-term policy action, Masha urged stronger fiscal and debt frameworks, enhanced monetary credibility, expanded tax bases, efficient public spending, and strategic investments in climate and human capital.