Solomon Islands has joined a World Bank initiative aimed at enhancing correspondent banking relationships in the Pacific region. This project, which includes countries like Fiji, Kiribati, and Vanuatu, as well as the Pacific Islands Forum, aims to ensure uninterrupted access to the global financial system.
The inclusion of Solomon Islands in this initiative will provide temporary correspondent banking support and technical assistance to improve compliance and financial infrastructure. This move is crucial for maintaining international money transfers vital for trade, investment, disaster relief, and remittances. The country experienced a 57 percent reduction in available correspondent banking services between 2011 and 2022.
“For Solomon Islands, this project is about more than banking—it’s about ensuring our people, businesses, and government can remain connected to the global economy,” said Harry Kuma, Solomon Islands Minister of Finance and Treasury. Remittance inflows account for over 5 percent of the country's GDP—a figure expected to rise with labor mobility programs.
The regional initiative includes a feasibility study on a Pacific Payments Mechanism aimed at reducing costs and improving cross-border payment reliability. “This project is a truly Pacific solution to a shared challenge,” stated Baron Waqa from the Pacific Islands Forum Secretariat.
The World Bank project was approved in August 2024 and announced by President Ajay Banga during his visit to the Pacific. It offers immediate solutions such as emergency correspondent banking services while supporting long-term reforms like anti-money laundering efforts. Australia, New Zealand, Japan, the UK, and the US also support this project through various funds.
“This expansion and achievement of effectiveness is a significant milestone for the Pacific CBR project,” said Stephen N. Ndegwa from the World Bank. Under additional financing, Solomon Islands will receive US$9 million for national activities including upgrades to payment systems and regulatory alignment.