The Supplementary Wamz Payment System Development Project the Gambia,Guinea Sierra Leone and Liberia


Overview

  • Reference: P-Z1-HZ0-002
  • Approval date: 09/11/2010
  • Start date: 02/02/2011
  • Appraisal Date: 16/09/2010
  • Status: OngoingOnGo
  • Implementing Agency: WEST AFRICAN MONETARY INSTITUTE - WAMI
  • Location: The Gambia, Guinea, SierraLeone Liberia

Description

4.2.1 The sectoral and specific objectives of the reappraised project have not changed (see Document: ADF/BD/WP/2008/48, dated 6 June 2008); these are to achieve full economic and monetary union of WAMZ countries, to foster a more conducive environment for private sector-led growth, and to improve the basic infrastructure of the financial sector in WAMZ through the upgrade of the payment systems. The sector indicators have however changed. The original design had only one impact indicator, that is to increase the share of intra trade to total trade in the WAMZ region. An additional two indicators have been incorporated in the reappraised project. These are:

(i) deepening financial sector integration, as measured by broad money supply (M2) as a percentage of gross domestic product (GDP); and

(ii) increasing private sector investment. It is important to monitor progress on these additional indicators, because the objectives of deepening regional financial integration, and enhancing environment for private sector development, are strategic priorities of the WAMZ member states, as well as of the Bank. The project continue to improve the basic infrastructure of the financial sector in The Gambia, Guinea, Sierra Leone, and Liberia. Except for incorporating Liberia in the project design, there are no other changes in the objectives, descriptions, and key outputs (see the project's Result-based Logical Framework). Further, the project's expected outcomes, remain the same: to increase the participation of the private sector businesses, and the citizens of The Gambia, Guinea, Sierra Leone, and Liberia in the formal financial sector, and to enhance the efficiency of funds transfers across the four WAMZ member states (see Box 1). The project beneficiaries include: the entire population of the four WAMZ countries ? of which a majority are women ? (through increased participation in the formal financial sector); and commercial banks, and private sector businesses - especially small and medium enterprises ?, (through more efficient transfers of funds). Finally, the project will continue to be organized in five components: (A) Real Time Gross Settlement (RTGS); (B) Retail Payments Automation (RPA); (C) Central Banking Application (CBA); (D) Infrastructure


Rationale

4.1.1 The WAMZ economy, with a combined GDP of US$390.6 billion (PPP), accounts for 73.3 percent and 19.1 percent, of the total ECOWAS' and Africa's GDP, respectively. The zone covers a total land area of 1.60 million square kilometers and a total combined population of 194.7 million people, representing 77.3 percent and 20.6 percent of the population of ECOWAS and Africa, respectively. Nigeria is the dominant economy, with over 76.5 percent of the population, and 85.6 percent of the zone's GDP. Ghana follows with 9.2 percent of the zone's GDP, while Liberia and The Gambia are the two smallest economies constituting 0.4 and 0.6 percent of the GDP, respectively. While there has been major intra-industry trade in the WAMZ countries, agricultural products remained the major exports of The Gambia, Ghana and Sierra Leone, followed by manufacturing. Crude oil accounts for over 97.0 per cent of Nigeria's exports. In Guinea, ores and metals form the greatest share of merchandise exports, while in Liberia rubber (86.1), gold (5.1) and diamonds (4.1) constitute main exports.

4.1.2 Since October 2002, the Bank in collaboration with the World Bank, has been promoting the growth and economic integration of the West African Economic and Monetary Union (UEMOA) by upgrading basic payments system infrastructure in UEMOA member countries: C


Benefits

5.1 The project sustainability, risks, and benefits (including environmental impact) remain the same as stated in the original design (see Document: ADF/BD/WP/2008/48, dated 6 June 2008), with the exception of inclusion of Liberia's project stakeholders as beneficiaries. Inclusion of Liberia implies that project implementation will be extended by 12 months to December 2012. However this is not expected to delay the start of realization of project benefits in The Gambia, Guinea and Sierra Leone, where implementation had commence by end-2008. Indeed, the implementation period for the activities under the supplementary grant is shorter than for the ongoing activities because the implementation teams in WAMI, and Central Banks have learned from the experience and process of the implementation of the ongoing project


Key contacts

IJEH Samuel Chukwuka - OSGE2


Costs

Finance source Amount
ADFUAC 5,000,000
GovernmentUAC 760,000
Co-financierUAC 935,000
DeltaUAC 255,000
TotalUAC 6,950,000

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