WAMZ PAYMENTS SYSTEM DEVELOPMENT PROJECT

PROGRESS REPORT

JUNE, 2017

PROGRESS REPORT ON WAMZ PAYMENTS SYSTEM DEVELOPMENT PROJECT

I. INTRODUCTION

The implementation of the West African Monetary Zone (WAMZ) Payments System Development Project in The Gambia, Guinea, Liberia and Sierra Leone funded by the African Development Bank (AfDB) was successfully completed in 2016 and working efficiently in the four beneficiary countries. The AfDB has recruited a consultant to carry out their Project Completion Report (PCR) to finally put the Project to conclusion. The successful completion of the Project has provided the platform for the four countries to register substantial gains in the attempt to move from predominantly cash economy to electronic mode of payments. This report will highlight the impacts of the project in the four beneficiary countries, Disbursement Update, Project Completion Report (PCR) by AfDB and progress report on the inter-linkage of the regional RTGS for cross-border payments and settlement.

II. IMPACT OF THE WAMZ PAYMENTS SYSTEM DEVELOPMENT PROJECT.

The WAMZ Payments System Development Project (WAMZ PSDP) has achieved its objective of upgrading the payments system infrastructure of The Gambia, Guinea, Liberia and Sierra Leone to a substantial level already attained by Ghana and Nigeria.

The Gambia was the first to go-live with all the components of the WAMZ Payments System Development Project in 2012 with all the twelve commercial banks operating in the country as participants in the RTGS. The Automated Clearing House and the national switch, the Gamswitch, currently has an interface with the RTGS platform and performs daily settlements of participants' whole sale and retail transactions.. While the Gambia economy still remained predominantly cash based, there is however, a gradual shift to electronic payments option. The Gamswitch is now at the forefront of promoting financial inclusion in the payment landscape of the Gambia through interoperability amongst the participating banks. Services provided by the National Switch include POS retail payments, Mobile based Payments, Internet/Web-based payment, P2P transfers, International (in-bound) cash remittance.

In Guinea, the implementation of the WAMZ Payments System Development Project was completed in 2016 and all the components are working efficiently. All the Solution Providers and Contractors are providing necessary post go live support in line with the contract, the Service Level Agreement (SLA) and the mandatory maintenance period. The Central Bank of Guinea (BCRG) conducted a study on the establishment of the National Switch, the study was entrusted to the Interbank Monetary Grouping of West African Economic and Monetary Union (GIM-UEMOA) which has a 14 years experience for technical assistance. BCRG is optimistic about the establishment of the National Switch within a reasonable time.

All the components of the WAMZ Payments System Development Project went live in Liberia in 2016 and are working efficiently. All the Solution Providers and Contractors are providing necessary post go live support in line with the contract, the Service Level Agreement (SLA) and the mandatory maintenance period. The Central Bank of Liberia during the course of the year continue to build on the achievement of the WAMZ Payments System Development Project with the following initiatives:

  • The Payments System Act enacted by the National Legislature in 2014was printed into hand bills
  • Completion of the Payment System Rules (ACP/ACH and RTGS) and awaiting approval from the Board
  • Payment of the Government of Liberia Taxes through the RTGS System in collaboration with the LRA and the Commercial Banks.
  • Launching of National Shared Switch (shared switch, telco, middleware, scheme gateway) with four Commercial Banks connected in 2016, other banks are in advance stage of connectivity in 2017.

In Sierra Leone, the completion of the WAMZ Payments System Development Project provided a platform for the country to launch the mobile money guidelines and the implementation of the National Switch project. The guidelines make way for the licensing and operation of the mobile money operators while the National Switch would move the society from one that is predominantly cash based to a cashless (electronic) society.In addition to the above, 2016 also witnessed the introduction of rules and procedures for the operation of the RTGS, ACH and the CSD with a robust pricing mechanism for the use of the systems. To further enhance efficiency in the timely delivery of payment services nationwide, the Bank is now working closely with the commercial banks for the establishment of a National Switching Company that would interconnect and make interoperable the various payments systems of all commercial banks. Other innovations introduce during 2016 by the Bank of Sierra Leone are automated upload of staff salaries and auto reconciliation.

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III. PROJECT COMPLETION REPORT (PCR)

The AfDB has recruited a consultant for their Project Completion Report and the institute is engaging the consultant and AfDB on the plan of the consultant. The exercise may take AfDB, WAMI and the consultant to all the countries for an assessment of the project outcomes as contained in the Appraisal Report log frame.

IV. CROSS BORDER PAYMENTS AND SETTLEMENT SYSTEM

In compliance with the decision of the convergence council at their meetings in February, 2017 in Freetown, Sierra Leone, WAMI in collaboration with the existing solution providers for the just concluded WAMZ Payments System Development Project commenced the process of designing the technical and functional specification of the proposed WAMZ Payments and Settlement System (WAMZPSS). The main objective of the WAMZPSS is the inter-linkage of the regional RTGS for cross border payments and settlement. The system will also serve as a platform for quoting and trading in WAMZ currencies.

The proposed solution is based on the standard components of CMA’s Financial Suite for National and Central Institutions where a set of powerful and highly scalable solutions are seamlessly and transparently integrated based on Straight Through Principles (STP). The RTGS Inter-linkage System Components is based on the implementation of the Regional Payment Gateway (RPG) component referred to as PNG/X. PNG/X is built around CMA’s packaged applications and it provides all necessary functions to interlink regional RTGS systems with a (possible) future extension for interlinking of Central Securities Depositories (CSDs) and Automated Clearing Houses (ACHs). The model is in line with the East African Community Payments System (EAPS)

The technical features is as follows:

  • it will link the respective RTGS systems of the six WAMZ countries via SWIFT to achieve efficient and safe cross border transfer of monetary value.
  • all Commercial Banks in the WAMZ will be connected as participants.

V. Other Components.

Harmonization of Rules and Regulations

The proposed project will involve engagement of consultant to support to WAMI and member countries in the drafting of legislation and policy to ensure that the payment and settlement systems are adequately supported and integrated throughout the WAMZ in order to protect payment flows.

Capacity Building

In line with our experience with EAC and other regional bodies that have implemented similar project in Africa, the proposed project will include capacity building in form of training and skill improvements in WAMI, NCBs and all participating commercial banks in the WAMZ.

Project Management and Implementation Strategy

WAMI will continue to serve as the Project Implementing agency with a Project Implementation Team (PIT) supported by a similar PIT at all the NCBs. The technical, functional and financial details of the Project as well as the Project Document will be presented to WAMZ' expert committee on the Quoting and Trading in WAMZ currencies.

VI. Conclusion

The successful completion of the WAMZ Payments System Development Project in the Gambia, Guinea, Liberia and Sierra Leone has created a unique opportunity to interlink the six zonal RTGS for cross border payments and settlement system.. WAMI in collaboration with the Zonal Payments System Committee and the expert committee on trading and quoting in WAMZ currencies will review and agree the proposed model at our next meeting.