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US$23m WAMZ Payment System Project Launched

Sep 17, 2008, 4:46 AM | Article By: By Baboucarr Senghore

In what appears to be a major leap in its march towards a strong and stable Monetary Union and the establishment of a robust payment system, the Secretary of State for Finance and Economic Affairs, Musa Gibril Bala Gaye yesterday inaugurated a US$23m West African Monetary Zone (WAMZ) Payment System Development Project for The Gambia, Guinea and Sierra Leone.

The African Development Bank (AFDB) funds the project, which is expected to improve key financial system infrastructure in the region and promote the creation of a single currency in the sub-region and boost integration. It, among other things, aims to bring the three countries, namely Gambia, Guinea and Sierra Leone, to the same level as those in Ghana and Nigeria in order to facilitate the harmonisation of the payments in all the five member countries of WAMZ.

The main components of the payments system improvement process in the three different countries include, Real Time Gross Settlement (RTGS) system; Automated Clearing House (ACH); Automated Cheque Processing (ACP); Scriptless Securities Settlement (SSS) system; Banking Application; and Infrastructure Upgrade.

In his inaugural statement, Musa Gibril Bala Gaye, Secretary of State for Finance and Economic Affairs, said even though the project is time constrained, the expertise available on payments systems will be leveraged to assist the three countries to realise their objectives of payment development without problems.

According to Secy. Bala Gaye, in as much as they celebrate the arrival of the grant, they must very early put the carnival of the grant away and set themselves to deliver what the donors expect of them. "The systems must also support the realisation of a single currency for the WAMZ member countries and reduce transaction costs for every sector of the economy," he added.

For his part, Momodou Bamba Saho, Governor of the Central Bank of The Gambia, underscored the importance of Payment Systems as an important component of the financial infrastructure.

According to Governor Saho, individuals, businesses and government agencies rely upon an efficient payments system to pay for goods and services, receive payments and pay for investments. "The challenge now is to implement the project in the quickest possible time. In this regard, we would need the continued co-operation of all stakeholders, the national central banks, the project co-ordinators at WAMI and the ADB and the commercial banks to achieve success.

Speaking earlier, Dr. Temitope W. Oshikoya, Director General, West African Monetary Institute (WAMI), noted that although the challenges of the assignment are many, the benefits of the project are very rewarding. These, he said, include the control of credit and systematic risks, leading to increased confidence in the security and reliability of payment instruments; minimisation of transaction costs among others.

Also speaking earlier, Mr. Mohamed H'midouche, Regional Resident Representative, African Development Bank (ADB), Senegal Office, said as much as the project will directly benefit The Gambia, Guinea and Sierra Leone, the ADB is delighted to be associated with it as it has great potential to contribute to deepening regional economic integration and financial governance in the continent