ICCOS CURRENCY CONFERENCE
OPENING REMARKS
BY
DR. ERNEST ADDISON
GOVERNOR, BANK OF GHANA
Delegation from Currency Research International (ICCOS),
Fellow Central Bankers from the Middle East and Africa,
Distinguished Participants,
Ladies and Gentlemen.
1. Good morning and let me say 'Akwaaba', which means a warm welcome
in our local language, to all delegates especially those who are in Accra
for the very first time. Let me also extend our appreciation to the
Currency Research International (ICCOS) for selecting Accra as the host
city for this year's Middle East & Africa (MEA) Cash Cycle Seminar.
This unique event brings together central bankers, commercial bankers
and other industry experts to deliberate and share experiences on different
aspects of currency cash management, distribution and circulation within
the broader payments systems framework.
2. Ladies and Gentlemen, this Conference is taking place at a time that the
Bank of Ghana is embarking on some crucial reforms aimed at ensuring
financial stability and promoting efficiency in Ghana's payments system.
As we all know, efficient and functional currency and payment systems
are fundamental to the effective functioning of any financial system. And
this is broadly in line with the Bank of Ghana's core mandate to achieve
price stability, contribute to the promotion and maintenance of financial
stability, and ensure a sound payments system.
3. Ladies and Gentlemen, Good business thrives in an environment of
macroeconomic stability. This is why we must nurture a culture that puts
a premium on keeping inflation low. The macroeconomic framework put
together by the Government focuses on stability. Fiscal Monetary Policy
mix was crafted to bring inflation down and anchor inflation expectation.
The results of the decisive policy implementation are clear. Inflation has
been on a downward trend from 15.4 percent in December 2016 to 9.4
percent in December 2018, remaining broadly anchored within the
medium-term target band of 8±2 percent. The disinflation process has
been supported by the relatively tight monetary policy stance throughout
the period. In addition, other macro indicators are pointing in the right
direction. Growth momentum has picked up, the trade account remains in
surplus, and there is also relative stability in the exchange rate, despite
recent volatilities driven by external developments.
4. Banks are the epicentre of industry and critical for the effective
transmission of policy to the real economy. The Bank of Ghana therefore
undertook widespread regulatory reforms to build a strong, safe and sound
banking sector to ensure effective financial intermediation for economic
growth. Key among the reforms was the increase in the minimum capital
requirement of banks to GH¢400 million from GH¢120 million. The
recapitalization ended on a solid note with a more consolidated banking
sector as weaker and under-capitalised banks that posed risks to financial
stability were removed. This has enhanced the efficiency and profitability
of the remaining banks and helped restore confidence and resilience in the
banking sector, with the banks now better positioned to support private
sector-led growth in the Ghanaian economy.
5. For the past two decades, the Bank of Ghana has taken steps to improve
the payment systems infrastructure, alongside strengthening the regulatory
frameworks to support the expanding financial technology space. The
overall objective is to broaden the scope of financial services access and
deepen financial inclusion, while taking advantage of the increasing
digital revolution in the financial sector.
6. In 2018, the Bank of Ghana, working with other stakeholders,
successfully completed the Mobile Money Interoperability (MMI) project
which established an integrated and interoperable payments ecosystem.
In this regard, all the three (3) key national payment pillars in Ghana,
namely; mobile money, e-zwich and gh-Link are now interoperable to
facilitate seamless movement of funds across these systems.
7. Globally, the rapid growth in technological advancement has transformed
the payment landscape with far reaching impacts. With this global drive, the
Bank of Ghana has taken full advantage of recent technological advances to
promote a cash-lite economy within the context of the current existing
digitization policy. These tie in with the Government's agenda to promote
social inclusion drive for a more formalized economy through digitization
and automation of business processes. The core part of the strategy is to first
develop a National Identification System that will facilitate efficient delivery
of public and private services, including financial services, mobile banking,
social safety nets, health insurance, and revenue collection, among others.
8. In collaboration with other stakeholders, the Bank of Ghana is working to
change financial services delivery to support the emerging digital society.
Accordingly, the Bank has revised the Payment System Act 2003 (Act 662)
and the Electronic Money Issuers and Agents Guidelines (2015) and
consolidated these into a draft Payment Systems and Services Bill, which
will soon be passed by Parliament. The purpose of consolidating the several
pieces of legislature is to take advantage of technological changes,
innovations and provide a broader regulatory environment for competitive
delivery of innovative payment solutions in the country.
9. The improvement in Ghana's digital payment systems are also supportive of
online transactions aimed at financial inclusion. Available data show
significant progress in the deployment of electronic payments such as
mobile money, payment cards, payment apps, direct debit and credit funds
transfer, instant retail payments and virtual cards as alternatives to cash. In
particular, mobile money transactions have grown by leaps and bounds.
Active mobile money accounts has jumped from in 345,434 in 2010 to over
13 million subscribers with value of transactions of about GH¢223.2 billion
in 2018.
10. Distinguished Ladies and Gentlemen, in spite of the digital revolution and
rising use of electronic payments and digital currencies, we continue to
see cash dominating transactions across several of our countries within the
Sub-Saharan African region. Undeniably, cash still remains the preferred
medium of payment by the large informal sector, although trends are
gradually shifting towards mobile money in Ghana. Thus, while making
progress in financial inclusion by accelerating the migration to e-payment
platforms, we are also mindful of the relevance of cash in our day-to-day
dealings. This is why we must commit to the on-going currency feature
enhancements and management of cash in circulation.
11. In this regard, the Bank of Ghana will continue to monitor the quality of
substrates and features of the Ghana Cedi and take appropriate actions to
make the Cedi an all-time secured currency. Special attention is being
devoted to improve the features to make it more resilient to counterfeiting
threats and facilitate data collection for cash life cycle analysis of the
Banknotes. The central bank will also conduct sustained currency
awareness campaigns to educate the public on the proper handling of
banknotes.
12. Distinguished Ladies and Gentlemen, this Seminar provides opportunities
for participants to deliberate on currency management and operational
issues. A cursory glance at the Conference Agenda indicates a very tight
programme starting off with a closed door Central Bank workshop on
substrate for Banknote manufacturing. This would be followed by the
plenary sessions on topics such as,
● Ethical principles in Central Banks,
● Crypto Currencies - The Real Threats, Challenges and Future
Technologies,
● Big data and the life cycle of the Banknotes,
● The changing role of CITS,
● Cash handling and circulation models, and
Efficient co-existence of Cash and Digital Payments
●
13. I can also see Technology Exhibition Areas set up for leading currency
industry suppliers to demonstrate their products and innovations in currency
production, counting, sorting, authentication, recycling, branch automation,
tracking & tracing, packaging, etc. The programme is expected to end with a
tour of the Bank of Ghana's new Cash Centre, which was commissioned in
2015.
14. To conclude, let me once again express my immense gratitude to the
organizers and the Secretariat for the hard work and diligence in putting
this seminar together, not forgetting the various sponsors for their kind
generosity. I hope that the outcome of the seminar series will provide
cutting-edge policy strategies to strengthen currency management across
the region. Enjoy your stay in Accra and please indulge in some shopping
- most of our shops accept cash payments!
15. On this note, I declare the 2019 ICCOS Currency Conference dully
opened. Thank You.