The interoperability of means of payment should facilitate the settlement of cross-border transactions within the continent, according to the President of the African Central Banks Association (ABCA), Buah Saidy.
After the ratification of the African Continental Free Trade Area (AfCFTA) agreement by several states, financial institutions want to further promote economic cooperation and trade through the establishment of a monetary union and a single currency.
This project entrusted to the Association of African Central Banks (ABCA) “will be achieved through cooperation and reforms in the areas of monetary, banking and financial innovations, in order to improve the interoperability of financial systems in member states,” said ABCA President, Buah Saidy, who is also Governor of the Gambian Central Bank.
In its report on Instant Payment Systems (IPS) in Africa, AfricaNenda, which specialises in universal financial inclusion on the continent, highlighted interoperability as the main challenge for IPS on the continent.
As the financial sector is constantly evolving, “it is therefore imperative that payment systems are interconnected to facilitate the settlement of cross-border transactions,” Saidy said, stressing that central banks are responsible for carrying out this mission, “a prerequisite for economic convergence.
Speaking on Thursday at the ABCA board meeting at the headquarters of the Central Bank of West African States (BCEAO), Buah Saidy also noted that financial inclusion is at the forefront of ABCA’s activities and will be strengthened by the integration of African Payment Systems.
“This is an important tool for facilitating trade and reducing transaction costs, but also a catalyst for achieving the common goals of a unified economic community,” he said, urging the ABCA Secretariat to continue to promote the digitalization and financial inclusion agenda to ensure the success of the project.
The Governor of the Central Bank of The Gambia reiterated that progress in the implementation of the African Monetary Cooperation Programme (AMCP) continues. The final draft of the statutes and structure of the African Monetary Institute has been presented to the Specialised Technical Committee (STC) of the African Union Commission and is awaiting the ministerial meeting.
According to Mr Saidy, significant progress has been made over the past seven months through the continuous assessment of countries’ progress towards meeting the convergence criteria. Of the 40 decisions identified as requiring action, about 90% of the activities for the review period have been implemented, he said.
“While these are commendable achievements, much work remains to be done, including, but not limited to, the issue of activating the peer review mechanism, the activities of various working groups and taskforces, the appointment of representatives for the monitoring of the Multilateral Memorandum of Understanding, the refinement of the convergence criteria and the ratification of the ABCA Statute,” he noted.
ARD/ac/lb/APA