1. REGULATION OF INTERNATIONAL REMITTANCES AND CENTRAL BANKS’ CO-OPERATION ON CROSS BORDER MOBILE PAYMENTS: FOCUS ON THE WEST AFRICAN MONETARY ZONE (WAMZ))
E. N EGBUNA (PhD)
DIRECTOR, FINANCIAL INTEGRATION
WEST AFRICAN MONETARY INSTITUTE (WAMI)
Being the text presented in the Panel discussion on Regulation of international Remittances and Central Banks’ co-operation on Cross Border Mobile Payments BY

2. AGENDA
Introduction
What is Cross Border Mobile Payments and its Significance to WAMZ and WAMI Mandate?
Overview of the situation and Current status of Mobile Payments development in the WAMZ region.
Associated Challenges
The way Forward

3. 1. INTRODUCTION- THE WAMZ PROGRAMME
The West African Monetary Zone consists of six countries:
- The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone.
The primary objective of the programme is the establishment of an economic and monetary union of the member countries.
The expected date for the launch of the Union is January 2015

4. 1. INTRODUCTION - THE WAMZ PROGRAMME
The West African Monetary Institute (WAMI) is the Administrative Organ of the WAMZ Programme.
- Undertakes multi-lateral surveillance exercises to ensure the attainment of set primary and secondary macro-economic convergence criteria;
- ensures the attainment of structural and institutional benchmarks;
- performing activities that will lead to the establishment of the:
West African Central Bank (WACB);
West African Financial Supervisory Authority; and
West African Monetary Zone Secretariat

5. 1. INTRODUCTION CONTD.
About 300 million mobile phone subscribers in Africa- the WAMZ accounts for about half this number
New technologies offer improvements to remittance services and reduction in transactions costs: mobile phones should hold the greatest promise for Africa
Remittances – Important source of income to developing countries like the WAMZ:
Poverty alleviation
Stimulation of development

6. 1. INTRODUCTION CONTD.
Most of the funds are sent through informal channels with attendant risks
Most of the remittances fall outside the regulatory monitoring scope
Money laundering
Exchange control monitoring

7. 2.CROSS BORDER MOBILE PAYMENTS – WAMZ & WAMI MANDATE.
As a working definition, cross border mobile payment is a real time mobile payment, which is crucial for both remittances(person to person), and for formal/informal cross border trade (business to business) transfers/settlements

8. 2.CROSS BORDER MOBILE PAYMENTS – WAMZ & WAMI MANDATE
Strong regional financial markets and institutions play an important role in supporting economic development
The formalization and efficiency of cross border remittance and trade flows is an important development goal
WAMZ/WAMI – confronted with the promotion of cross border mobile transfer, but not at the expense of financial stability

9. 3. CURRENT STATUS OF MOBILE PAYMENTS DEVELOPMENT IN THEWAMZ
Slow rate of evolution of mobile payments resulting from the following:
Shallowness of the financial system
Absence of a common regulatory framework within the region
Formal barriers to the provision of payment and transaction services by non banks
Formal and informal trade barriers

10. 4. SOME CURRENT ACTIVITIES OF WAMI TOWARDS PROMOTING THE WAMZ INTEGRATION AGENDA
ADB financed payments system development project
The Gambia: Already live
Guinea: End December 2012
Liberia; End December 2012
Sierra Leone: End December 2012

11. 4. SOME CURRENT ACTIVITIES OF WAMI TOWARDS PROMOTING THE WAMZ INTEGRATION AGENDA
Cross border banking regulation
Establishment of the College of Supervisors (CSWAMZ), leading to:
Capacity building
Information sharing
Corporate governance
Harmonization of banking supervision processes

12. 4. SOME CURRENT ACTIVITIES OF WAMI TOWARDS PROMOTING THE WAMZ INTEGRATION AGENDA
Capital Market Integration
Progressing towards a common regional capital market
Lower cost of capital
Increase access to capital
Stimulation of growth

13. 4. SOME CURRENT ACTIVITIES OF WAMI TOWARDS PROMOTING THE WAMZ INTEGRATION AGENDA
Harmonization of supervisory and reporting standards
Risk Based Supervision (RBS)
Implementation of eFASS technology

14. 4. SOME CURRENT ACTIVITIES OF WAMI TOWARDS PROMOTING THE WAMZ INTEGRATION AGENDA
Trade Integration
ECOWAS-WAMI joint task force on trade integration
ADB assisted national trade policies formulation for The Gambia, Sierra Leone and Liberia

15. 5. ASSOCIATED CHALLENGES
Development of non proprietary mobile banking solutions
Removal of entry barriers to potential new entrants with the attendant risk of disrupting lucrative business models of banks and mobile operators
Ensuring high levels of security and trust
Bank led/non bank led model?

16. 5. ASSOCIATED CHALLENGES
Are Consumers adequately protected?
Fraud
Loss of privacy
Service failure
How does it impact stability in the banking system and national/regional payments system?
Are payments and deposits adequately distinguished?
Are there laws backing e-money issuance?

17. 5. ASSOCIATED CHALLENGES
Are there legally backed agencies for cash deposits and withdrawals?
How do we manage AML/CFT risks?

18. 6. THE WAY FORWARD
Completion of the ADB funded payments system development project in the WAMZ with the possibility of the following adds-on
National Switch
Mobile money banking facilities eg, POS
Other e-banking channels
Installation of eFASS technology
eFASS is operational in Nigeria. It is being installed in Ghana. Liberia has an offer in principle for funding from one of the development institutions.

19. 6. THE WAY FORWARD Capacity building WAMI
Cross border payments and integration issues:
Choice of model for the WAMZ
II. CSWAMZ
Supervisory roles for cross border mobile payments
III. Member states’ Central banks and Telecommunications operators
Design of regulatory and legal framework
Passage of the Guidelines on electronic banking law by all member countries.

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