Payment Systems Development in Nigeria
Project Development Objective (PDO)
The main objectives of this technical assistance are (a) to assist the Central Bank of Nigeria (CBN) in building the capacity to develop and implement a legal, regulatory, and oversight payment systems framework and (b) to facilitate retail payments reforms (mobile payments, remittances, and government payments) toward a secure and more efficient and inclusive payment system in Nigeria in line with international standards.
The Central Bank of Nigeria sought technical assistance to enable its staff to effectively oversee the country’s payment systems by applying sound principles that achieve the public policy objectives of safety, efficiency, and—ultimately—financial stability. The CBN aims to address several existing gaps in the frameworks governing payment systems oversight, while it builds the capacity of its staff in those areas.
The technical assistance project will include the following activities:
1. Developing a retail payments strategy: This activity will support the CBN in developing a comprehensive strategy to ensure that retail payment reforms and modernization initiatives take place in a coordinated manner. Subactivities would include a detailed review of retail payments to identify key market players and institutional structures.
2. Improving safety and efficiency of the remittances market: This activity will review the action taken on the recommendations from the 2008 assessment against the Committee on Payment and Settlement Systems–World Bank General Principles for International Remittances. On the basis of this review and CBN priorities, technical assistance will be provided to implement the updated set of recommendations.
3. Improving the efficiency of government payment flows: This activity will include the review of existing modalities for government payments with a view to providing advisory services on the best practice for improving government payment flows.
4. Improving legal and regulatory framework: This activity will encompass a detailed review of the prevailing legal and regulatory framework that governs financial market infrastructure and retail payments, including mobile payment services and remittances. Recommendations may include specific amendments to existing laws or enactment of new laws.
The main expected outcomes of the project are as follows:
1. Increased payment system efficiency and inclusiveness
2. Strengthened legal, regulatory, and oversight framework for payment systems and remittances
3. Facilitated reforms of retail payments, remittances, and government payments
4. Improved oversight arrangements and capacity