EAC launches settlement system to enable payments in real time

Central Bank Governor Prof Njuguna Ndung’u.

By JOHN OYUKE

NAIROBI, KENYA: East Africa Community (EAC) Secretariat has announced the launch of a common platform that will allow traders to receive payments in real time and in local currencies.

The Sh2 billion ($23 million) EAC Payment and Settlement Systems Integration Project (E-pssip) is financed by the African Development Bank (AfDB).

It aims at enhancing convergence and regional integration of payment and settlement systems; strengthening a harmonised legislative and regulatory financial sector and building capacities in the partner States.

Speaking during the launch, Central Bank of Kenya Governor Njuguna Ndung’u described the project as important in light of the proposed East African Monetary Union.  He said the role of the Partner States’ central banks is to ensure there is transparency in the use of the funds provided by AfDB.

“The use of the funds will therefore be monitored through the Project Steering Committee and the National Core Teams, which have already been constituted by the central banks,” added Prof Njuguna, who is also Chair of the EAC Monetary Affairs Committee.

He also disclosed that central banks would also be expected to come up with a work-plan detailing the activities to be funded under the project. Also present during the launch in Arusha, Tanzania were Mr Jacob Mukete from AfDB, Dr Natu Mwamba, Deputy Governor of the Bank of Tanzania, Aimee Laurentine Kanyana, Deputy Governor of the Bank of Burundi and Experts from EAC central banks.

The EAC Deputy Secretary General in charge of Planning and Infrastructure, Enos Bukuku, said financial sector integration is the anchor that will make the EAC region a more viable destination for both foreign and domestic investment. He noted that the sector would help in bolstering the liquidity of the region’s capital markets and creating financing avenues for investors and issuers.

Dr Bukuku informed stakeholders that EAC in collaboration with various development partners was already working towards the establishment of a single market in financial services at regional level among EAC partner States to support broadening and deepening of the financial sector development.

FINANCIAL MARKETS

He called for stronger co-operation among the partner States in several areas including financial inclusion, a robust legal and regulatory framework, adherence to international principles as well as the development of financial markets infrastructure.

“Today marks yet another important milestone in the implementation of Article 15 of the East African Monetary Union Protocol Payment and Settlement System,’’ the EAC official noted in a statement released by EAC Secretariat.

He said the system would ensure secure, reliable and integrated payment and settlement system for efficient flow of financial transactions within the region.