East African States Launch Faster Payments Scheme
Faster and easier transactions within the East African Community (EAC) states have been promised with the launch of the EAC Payment and Settlement Systems Project (EAC-PSSIP), an initiative by the EAC Secretariat and the African Development Bank (AfDB).
The EAC is an intergovernmental organisation comprising five countries in the African Great Lakes region in eastern Africa: Burundi, Kenya, Rwanda, Tanzania and Uganda
The five central banks of the EAC partner states will facilitate the implementation of the project, which is expected to speed up payment system in the region.
The major objective is to broaden and deepen the financial sector by integrating the regional financial market infrastructure and facilitating cross border fund transfers. The project also aims to support the economies of the region and providing outreach to rural areas in order to encourage greater participation in the formal financial sector.
At the project launch, Dr Natu el-Maamry Mwamba, the Bank of Tanzania’s deputy governor, said the project takes East Africans to the next level of regional integration. Traders and ordinary citizens will now be required to use their local currencies when doing transactions within the region.
EAC secretary general, Dr Richard Sezibera, added: “Functioning payment and settlement systems represent a basic infrastructure for the functioning of market economies.
“This is because they provide effective mechanisms for the exchange of money between transacting parties; ensure finality and irrevocability of both payment and settlement; enables management, reduction and containment of systemic and other payment related risks and facilitate implementation of monetary policy.”