By Stanley Opara

Tuesday, 4 Jan 2011

The implementation of the monetary policy framework in Nigeria may be under serious threat if the delay in end-to-end electronic payment applications in the government cycles continues.

Our correspondent gathered on Monday that this could have been caused by the slow pace of programmes implementation targeted at facilitating the achievement of Payment System Vision 2020, aimed at displacing cash as the most preferred payment method in Nigeria.

Aside from being a huge threat to successful monetary implementation in 2011, there are also fears that the delay in the payment process, especially in the government cycles may continue. This is coupled with unnecessary interaction between contractors and government officials, and less control and supervision mechanisms resulting in less efficient and effective payment processes.

The Principal Consultant, Mobile Money Africa, Mr. Emmanuel Okoegwale, who spoke to our correspondent on Monday, confirmed the imminent risks adding that the country‘s financial system had so much to lose, especially in the area of credibility.

He said innovations were meant to drive regulation if the country must move forward in this regard, but noted that in Nigeria the case was the other way round as the regulator remained the agent driving innovation.

Okoegwale, however, called for a continuous review of the nation‘s e-Payment policy framework, maintaining that all stakeholders must express the desire to make the system work.

He also identified the masses as key movers of the initiative, especially in the organised private sector.

However, in a recent address on the Role of Regulatory Authorities in e-Payment System, the Director, Banking and Payments System Department, Central Bank of Nigeria, Mr. A.S. Atoloye, said, well functioning payments systems had important role to play on the monetary policy, financial stability and overall economic activity.

He, however, commended the Federal Government directive for the implementation of electronic payments system at all Ministries, Departments and Agencies, which became effective since January 2009.

He explained that several challenges at the end of the MDAs had slowed down the use of the measure.

The policy states, ”Cheques shall not be used as instrument for payment from any account of the Federal Government MDAs, except those that were exempted by the Office of the Auditor-General of the Federation.

”Payment from any account of the Federal Government MDAs shall be applied directly to beneficiary‘s account.”

The MDAs are expected to implement end-to-end e-Payments, which ensured minimum human intervention.

According to Atoloye, the smooth functioning of e-Payment system depends on the ability of the stakeholders to perform their roles effectively.

For deposit money banks, he said customers‘ account must be maintained as e-Payment rode on valid bank account.

Atoloye added that e-Payment products and services should be issued based on agreed terms and conditions and that there should be investment in technology to ensure reliability, availability and efficiency of the system all the time.

He said customers should be offered education and customer care/support services.

According to him, Payment Service Providers, the Central Switch, users, the government and the regulator have similar roles to play to help the system.

Source: Punch