The immediate past Director General of the West African Monetary Institute (WAMI), Dr. Ngozi Egbuna, has disclosed that the institute is collaborating with the African Development Bank (AfDB) and the African Export Import Bank (Afreximbank) to create mechanisms that would improve economic and financial integration of West African sub-region and also provide strong platform for effective functioning of the Africa Continental Free Trade Area (AfCFTA) agreement.
These mechanism includes the bid to create a single unique banking identification system for the entire West African Monetary Zone that would be modeled after the Nigeria’s Biometric Verification Number, which tracks every bank customer’s activities within the country’s banking system.
Egbuna, revealed this during an interview on AriseXchange, programme.
She explained: “We have also applied for funding, which we hope to receive, to enable us create unique bank identification like the Nigeria’s BVN for the sub-region. The whole idea is that once you are ‘Ngozi Egbuna’ here, you are ‘Ngozi Egbuna’ throughout the ECOWAS sub-region so that one cannot be ‘Ngozi Egbuna’ here and ‘Egbuna Ngozi’ there.
“You have to be identified uniquely, which is a sort of knowing who is who within the sub-region. It is a fantastic project that the AfDB is going to give us funding for.”
She also stated that the payment platform the institute was developing in conjunction with the Afreximbank would enable participants under the AfCFTA to buy and pay for goods and services from any African country in their respective local currencies.
This would relieve participants the trouble of looking for third party currency to pay for their transactions, conserve foreign reserves, resolve the corresponding banking issues and formalise the informal cross border trading activities.
Egbuna added: “We thought that the way to go is quoting and trading in our local currencies and approached the Afreximbank, which incidentally was looking to do that type of business.
“The Afreximbank took us on as the pilot zone to put up the payment system platform that will enable the common people on the street to quote and trade in their local currencies.
“By the special grace of God it will go live at the end of March 2021 and when it becomes realistic will be spread out across Africa. Incidentally the African Union has taken it onboard because they know how important payment and settlement is.”
She described the journey toward the financial integration and attainment of a single monetary zone for the sub-region as a work in progress although it has failed to achieve two previous deadlines for its take off. The first two deadlines were 2005 and 2009, while the 2015 deadline was overtaken by the ECOWAS’s directive in 2014 that enjoined the institute to focus on the single currency agenda of the sub-region.
However, the institute has gone far in the area of financial integration, especially with the issue of capital market integration.
It has also gone as far as, “setting up bank and non-bank’s supervisors as well as a college for the insurance sector operators so that we exchange information and from time to time to know what is new and what is going on in the financial scene.”
“We also have the financial stability report that we publish which shows you the activities of the financial industry and the financial sector at any given time.
“Moreover, in 2012 the AfDB gave us funding on grant to develop payment infrastructure in four of our countries, namely Gambia, Guinea, Liberia and Sierra Leone. That was to bring them up to the online real time settlement system that we have in all the other countries. And so every country as at December 2016 went live that is why we can have cheques and POS in all of our countries. We put in modern state of art facilities in all these countries,” she said.
The former director general said the institute was enjoying the support of the governors of central banks who are mirroring and seeing what is going on and have even extended the payment window to operate in the T24 and other payment system architecture within the central banks.
“It is going on well and once it goes on live it will be a game changer for the AfCFTA and trades within the continent,” she said.