Liberia makes first step towards the creation of a West African monetary zone
The Central Bank of Liberia has officially started implementing the West African Monetary Zone (WAMZ) payment system development project, which represents a first step towards the transition to a single currency in this region by 2020.The Central Bank of Liberia has officially started implementing the West African Monetary Zone (WAMZ) payment system development project, which represents a first step towards the transition to a single currency in this region by 2020.
The project includes the implementation of an Automated Clearing House (ACH), which encourages the usage of credit transfers for domestic payments and is intended to further eliminate float and move the financial system into a credit-driven system, The Inquirer reports.
The ACH will also be used to handle large volume and low value payment transactions in three of the WAMZ countries, Liberia, Sierra Leone and the Gambia, with participating institutions exchanging electronic files, name remittance and structure according to pre-defined formats.
The sector goal for WAMZ is to achieve full economic and monetary union of its four member states: Liberia, Guinea, Sierra Leon and the Gambia, in order to foster a more conducive environment for private sector-led growth, according to the African Development Bank.
The primary objective is to augment the payment systems in
the Gambia, Guinea, and Sierra Leone in order to enhance the performance of their financial systems.
In addition to deepening these countries' financial sectors, the project aims to increase private investment through improved efficiency of financial intermediation.
Furthermore, the project will facilitate the process for the launch of a monetary union in the Zone and stimulate increased economic and trade relations in the region.