WAMZ Payment System launched

Wednesday, September 17, 2008
The West African Monetary Zone (WAMZ) Payment Development Project, was yesterday launched at the Kairaba Beach Hotel in Kololi.

The new project, estimated at US $23 Million, will directly benefit The Gambia, Guinea and Sierra Leone. This major initiative also aims at promoting the creation of a single currency in the sub-region and boosting integration to the economic and monetary union in WAMZ, resulting in a larger regional market, among other issues.

Speaking at the launching ceremony, Hon Moussa Gibril Bala Gaye, the secretary of state for Finance and Economic Affairs, said the Founding Fathers of the Economic Community of West African States (ECOWAS) had a vision to bring together the West African sub-continent, made up of its 15 member nations, as one block under an economic and monetary union.

He then revealed that the ECOWAS journey started about 30 years ago, adding that the failure to realise the laudable goals of economic integration, led to the introduction of the WAMZ programme in April 2000.

“The WAMZ programme has twice postponed the start date for the establishment of the West African Central Bank (WACB), which will issue and manage a single currency, Eco, for the member countries. The reasons alluded to the postponement included the lack of appropriate infrastructure that will aid the WACB to undertake effective monetary policy management.

One of such infrastructure is a robust and efficient payments systems infrastructure in all the five member countries. Ghana and Nigeria have made great strides in modernising their payments systems while The Gambia, Guinea and Sierra Leone have been sourcing for funding to develop their payments systems,” SoS Bala Gaye revealed.

The Finance and Economic Affairs secretary of state, also, on behalf of the presidents and governments of the Republics of The Gambia, Guinea and Sierra Leone, extended sincere gratitude to the president of the African Development Bank (ADB), and the president of the African Development Fund (ADF) for appreciating these countries’ needs and granting them the sum of US $23M. In a similar vein, he commended WAMI for taking the initiative to obtain the grant on their behalf.

For his part, M. Mohamed H’ Midouche, the Regional Resident Representative for the African Development Bank Group, said by developing the required regional financial infrastructure and harmonising the payment systems of the WAMZ member states, the project will catalyse the process for economic integration of the West African Monetary Zone.“This will enable its beneficiaries to achieve important regional and national objectives by improving the efficiency of financial intermediation, the management of systemic risks in the financial systems and the liquidity management, monetary policy implementation and the general deepening of the financial sectors,” he observed.
He also seized the opportunity to highlight that a key component of the project is the development of Real Time Gross Settlement (RTGS), a large value funds transfer system whereby financial intermediaries can settle inter-bank transfers continuously and in real time for their own account as well as the accounts of their customers in the three countries.

He expressed delight on behalf of the African Development Bank to be associated with this project to promote good governance and transparency in transactions and also assist in the anti-money laundering activities.

Momodou Bamba Saho, the governor of the Central Bank of The Gambia, recalled that it was in May 2005 in Banjul, that the Authority of the Heads of States of WAMZ issued the Banjul Declaration which designated December 1st 2009, as the commencement date of the monetary union. He went on to say that the West African Monetary Institute (WAMI) was tasked with the responsibility of preparing and implementing an Action Plan that would ensure that the WAMZ countries take tangible steps towards establishing the monetary union on schedule.“An important component of the Action Plan was the development and standardisation of the Zonal Payment and Settlement Systems.

This included the setting up of Real Time Gross Settlement (RTGS) systems for The Gambia, Guinea and Sierra Leone to bring them in line with RTGS systems already in existence in Ghana and Nigeria. The project also included Automatic Cheque Processing (ACP) and Scriptless Securities Settlement Systems (SSSS),” the Central Bank Governor noted.

Author: by Assan Sallah & Ebrima M Kanuteh