News Column

ECOWAS Nudges Member States Towards Payment Systems Integration

June 25, 2014



ABUJA, Nigeria, June 25 -- The Economic Community of West African States issued the following news release:

The ECOWAS Commission has called on Member States to intensify efforts toward the setting up of a regional Payment and Settlement System, as a key component of an ECOWAS Common Investment Market (ECIM) and a necessary building block for the establishment of an economic-union.

In an address to the Central Banks Payment Systems Experts' meeting which opened on Wednesday 25th June 2014 in Dakar, Senegal on the establishment of the EPSS, the Commissioner for Industry and Private Sector Promotion Mr. Kalilou Traore, said the "EPSS (ECOWAS Payment and Settlement System) programme is one of the roadmap activities for the realization of ECOWAS single currency, and in tandem with steps already taken by some Regional Economic Communities (RECs) across the African Continent."

"I believe that you are well familiar with this process, having implemented similar systems in your respective central banks, though at national levels," the Commissioner told the experts, adding that the goal is to "promote monetary and financial integration, facilitate intra-Community trade in goods and services and the realization of the Community's objective of establishing an economic union in line with Article 2(e) of the ECOWAS Revised Treaty. "

He also reminded them that Article 52 of the Revised Treaty "empowers the Committee of Governors of Central Banks of ECOWAS Member States to make recommendations to the ECOWAS Council of Ministers, on the operations of the clearing system and of payments as well as other monetary issues. "

A key requirement on each Member State for the attainment of a regional economic union is "efficient and effective national payment system that is internationally acceptable and that would ultimately be interlinked within the region," the Commissioner said, in the address read on his behalf by Mr. Peter Oluonye, the focal point and Principal Programme Officer at the Private Sector Directorate of the Commission.

"Luckily, the EPSS study revealed that with only Guinea Bissau and Liberia, all the banks in the rest 13 countries in the region are already operating on the Real Time Gross Settlement (RTGS) system, which is a critical pre-condition for the operation of the EPSS," the Commissioner revealed, adding that the Commission is using a strategic approach in the EPSS process with the participation of all regional stakeholders including regional central banks, national interbank payment and settlement systems, West African Monetary Agency (WAMA) West African Bankers Association (WABA), switch operators in the region, and with inputs from the World Bank.

He listed the expected benefits from the EPSS to include guarantee of prompt payment to the exporter - at the latest by the next day that the importer deposits the required amount at its Commercial Bank within the Member State; building of trust amongst traders that would lead to an increase in intra-regional trade and drastic reduction in the cost of intra-regional trade transactions and remittance.

Others are leveling of the playing field by getting all commercial banks to deal directly with one another without having to go through banks outside the region; predictability in payment timing and reduced payment cycle time as compared to other international payment alternatives; lower cost and quick turn-around of EPSS payments translates into savings for the importer; and easy process for making cross-border payments at retail and wholesale levels.

Given the "importance attached to EPSS in our economic integration," Commissioner Traore urged the experts to thoroughly examine the submissions by project consultants and make recommendations to the forthcoming Committee of Central Bank Governors Meeting."

"With EPSS, the need for correspondent banking to facilitate trade transactions between ECOWAS Member States will soon be unnecessary, " he affirmed.

The report of the ongoing meeting will be considered by a two-day WAMA experts meeting which begins on Friday 27th June that will feed into the Central Banks Governors meeting next week, all in the Senegalese capital.

TNS 18EstebanLiz-140626-30FurigayJane-4778376 30FurigayJane


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Targeted News Service


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters