Integration of payment systems in Ghana and Nigeria is progressing steadily

Economic news for Monday, February 22, 2021

Source: thebusiness24.com.gh

02/22/2021

Ghana and Nigeria have made steady progress in integrating payment systems, as part of the implementation of an integrated payment system for West African states.

In an interview following a training session for financial journalists, Mr. Archie Hesse, Managing Director of Ghana Interbank Payment and Settlement Systems (GhIPSS), revealed that the technical level of integration has been completed and that he all that remains is to synchronize the payment. currency exchanges during transactions.

“We do transactions in cedis, Nigeria in naira. What are we doing? Are we going to have a daily exchange rate between the currencies of the two countries? It is a key factor [currency settlement] to watch, ”he said.

According to Ghana’s National Payment Systems Strategic Plan (2019-2024), the final integration of West African states’ payment systems will be implemented by the end of 2022.

GhIPSS is expected to introduce a system to link the national switching and processing system – gh-LinkTM – with other countries in West Africa.

Mr. Hesse noted that Afreximbank, the pan-African trade finance lender, has launched a project to address the currency implications of cross-border payment transactions in Africa.

Late last year, the bank, together with the African Union and some African central banks, launched a Pan-African Payment and Settlement System (PAPSS), which is a central financial market infrastructure to support payment agreements between African states to facilitate Africa’s integration.

“Once it’s done, with the switches all hooked up to each other, it should be easy to integrate,” Hesse said.

The PAPSS expects to connect the entire continent, handle instant payments in multiple African currencies, and provide a settlement mechanism that builds trust within the ecosystem.

According to its sponsors, PAPSS is making two critical changes to trade finance in Africa: minimizing the use of hard currency in commercial payments and domesticating payments and settlements in Africa. This in turn will help organizations and their financiers to better manage currency risks.