East African member States are gathering in Kigali to discuss how to integrate payment and settlement systems, a move that is expected to lay foundation for the region’s common currency.
The three-day workshop at Mille Collines Hotel has attracted experts in electronic payment in the EAC and outside the region.
“We need clear infrastructure to harmonise and integrate payment and settlement systems, otherwise we cannot talk about the Common Market,” the Governor of the National Bank of Rwanda (BNR), François Kanimba, said yesterday, in an interview.
Participants will discuss how different switches in the region can communicate with to each other for effective transfers and how business operators can access and do transfers across the region.
“A (Rwandan) business person will not need to carry money to a supplier in Kenya, and this is expected to reduce unnecessary costs and risks involved,” Kanimba said.
The Governor said that banks are impatiently waiting for the harmonised system because they spend a lot of money in cash management operations with high risk of cash manipulation.
Gabriel Negatu, Director of Governance, Economic and Financial Management in African Development Bank, said that Information Communication Technology (ICT) infrastructure and regulation are the two important building blocks for an integrated payment system.
“The whole agenda is something that the Bank has put on high premium level because, by integrating the system, each transaction is low value,” Negatu said.
He added that the system will benefit the poor and un-bankable people especially in rural areas.
He added; “We (ADB) brought experts from West Africa in to share their experiences.” Mobile money is another opportunity to facilitate electronic transfers, with 19.5 million people mobile money subscribers in EAC.
Kenya is leading with 14 million followed by Tanzania 3.2m, Uganda 2.1m and 190,000 and 8,500 for Rwanda and Burundi, respectively.