Nigerian Payments System Goes Live on SWIFT

The Central Bank of Nigeria (CBN) has added connectivity to SWIFT for its high value payments system.

The Real Time Gross Settlement (RTGS) system, which is now a part of SWIFT, was introduced recently as part of the CBN’s Payment System Vision 2020 (PSV2020), which began in 2007, attempting to align the Nigerian payments system in line with global best practices. The adoption of SWIFT also fits in with the goals of PSV2020, as the connectivity provides the Nigerian financial system with a future-proof payments infrastructure and helps Nigeria integrate with other financial markets in the region and globally.

“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 a strong interest in the development of payments and settlement systems,” says Dipo Fatokun, director, Banking & Payments System Department, Central Bank of Nigeria.

Nigeria is the 20th country in Africa to adopt SWIFT for its domestic payments as well as its international payments infrastructure. Financial institutions and corporates can use the same SWIFT connection for both domestic and international payment traffic in Nigeria, thus reducing IT costs for the entire community. Plus, Nigeria’s SWIFT adoption will help the development of the West African Monetary Zone (WMAZ), 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.

“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,” says Hugo Smit, head of Africa South, SWIFT.

SWIFT is working with all the participants in WAMZ towards the development of the regional payment system, and The Gambia, Ghana, Nigeria and Sierra Leone are now all live on SWIFT.