High Value Payment System Goes Live on SWIFT at Central Bank of Nigeria
The Central Bank of Nigeria’s high value payment system has gone live on SWIFT. The move to SWIFT is a key element of the Central Bank of Nigeria’s Payment System Vision 2020 (PSV2020), which calls for a “Nationally Utilised and Internationally Recognised” payments system and provides a robust platform to support Nigeria’s continued economic growth.
The adoption of SWIFT for the infrastructure of Nigeria’s high-value payments via its Real Time Gross Settlement (RTGS) system will support improvements in interoperability of the country’s financial infrastructure, helping to improve settlement security and eliminate risk. SWIFT connectivity ensures Nigeria complies with global standards for critical payment infrastructure as set out by the Bank for International Settlements, providing the Nigerian financial system with a future-proof payments infrastructure and helping Nigeria to integrate with other financial markets in the region and globally.
Dipo Fatokun, Director, Banking & Payments System Department, Central Bank of Nigeria, said: “The importance of the payments system in any market economy cannot be over-emphasized. In particular, the link between the efficiency of the payments system, the effectiveness with which monetary policy is conducted, the soundness of the financial sector and, indeed, the overall performance of the economy is very strong. Thus, central banks the world over have more than cursory interest in the development of payments and settlement systems.“
The move by the CBN mirrors those of leading payment systems around the world and In Africa. Nigeria is the 20th country in Africa to adopt SWIFT for its domestic payments as well as its international payments infrastructure. Globally, clearing and settlement systems in more than 90 countries, carrying more than 240 million payments a year, already rely on SWIFT.
Using SWIFT provides proven benefits for the broader financial community in Nigeria. Financial institutions and corporates can use the same SWIFT connection for both domestic and international payment traffic. Reusing existing infrastructure and automatically complying with global standards reduces operational costs, improving operational efficiency and reducing operational risk for the entire community.
The move is also an important step for Nigeria within the West African Monetary Zone, a group of six countries (The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone) that plan to introduce a single currency and use a common payment system in order to boost regional trade and investment.
Hugo Smit, Head of Africa South, SWIFT, says: “By ensuring that Nigeria’s infrastructure is interoperable with both regional and international platforms, the move to SWIFT means that the Nigerian financial community will be easily able to interoperate within the West African Monetary Zone as this regional harmonisation project matures.“
SWIFT is working closely with all the participants in WAMZ towards the development of the regional payment system. Already, payments systems in The Gambia, Ghana, Nigeria and Sierra Leone are live on SWIFT.
Mr Fatokun said: “The support of SWIFT and all other stakeholders for the development of the national payments system is most needed not only in Nigeria but also in the WAMZ region.“