Deputy Governor of Bank of the Ghana (BoG) Mr. Millison Narh has affirmed that policy harmonisation and coordination across the West African sub-region is essential for successful and effective economic integration.

He said West African countries in the quest to enlarge their economies cannot afford to be implementing uncoordinated and divergent policies, because this would be detrimental to regional integration ideals.

Mr. Narh, who was speaking on challenges confronting payment system development in West Africa at the official opening of a two-day roundtable discussion on switch integration in the sub-region, said it is only through regional and sub-regional integration and cohesion that progress toward economic growth and development will be hastened.

The conference, under the theme “Getting Off the Starting Block -- Hitting the Stride”, will galvanise key players to deliberate and come out with concrete ideas to move forward the payment systems integration process across the sub-region.

“After two decades of financial reforms, payment systems in West Africa still remain cumbersome, costly and inefficient -- a key impediment to intra-West Africa trade and the quest to achieve a common market.

“Most sub-regional economies are cash-based, involving a lot of paperwork to effect payments and transact business across borders -- rendering the payment systems inefficient. In addition, payment systems are fragmented and lack competition, resulting in high payment costs and exorbitant bank charges,” Mr. Narh said

He said despite the numerous setbacks, the trend can be reversed with a well-developed and cost-effective payment system that can serve as a catalyst for hassle-free movement of goods and people, reduce costs and delays, and as well minimise the risks of holding cash -- such as theft, currency counterfeit and loss of interest and exchange rate value.

He advised countries within the sub-region to pursue reforms to upgrade their payment systems, modernising by taking advantage of technological advancement and other international developments to cope with increasing demands due to globalisation.

“To reduce risks introduced by competition, there is need to strengthen governance, risk management, compliance and oversight of the financial infrastructure at national and regional levels,” he said.

West African countries are making efforts at surmounting the challenges in order to take advantage of the numerous benefits of an efficient and effective payment system infrastructure.

In Ghana, the Central Bank has embarked on various policy interventions to develop the payment system infrastructure; such as the passage of the Payment System Act, 2003 (Act 662), the issuance of the Guidelines for Branchless Banking in 2008, and the establishment of the Ghana Interbank Payment and Settlement System (GhIPSS).