Statement By Dr. Abdul-Nashiru Issahaku, Former Governor, Bank Of Ghana On The Mobile Money Interoperability Issues
1. My attention has been drawn to the above claim which was attributed to the Vice President in his speech at an official event last week. I wish to categorically state that the claim that the Bank of Ghana (BOG), under the previous NDC regime was to commit an amount of GHC 4.6 billion of public funds into the proposed switch to interconnect mobile money transactions is totally false and should be disregarded.
2. SIBTON SWITCH was selected through due process to execute the contract using a self-financing mechanism to raise GHC4.6 billion on their own to build a robust interface intended to ensure efficiency and safety, among other benefits. Neither government nor BoG was going to pay the purported GHC4.6 billion. The amount was actually the estimated projection for the cash flow of investment to interconnect electronic payments and transfers over a fixed period.
3. For emphasis, BoG did not engage SIBTON SWITCH to provide only an interoperable platform costing the said amount. The SIBTON SWITCH solution was a lot broader in scope than the simple interoperability among
TELCOs that was launched by the Vice President.
4. For example, under the SIBTON SWITCH framework, both TELCOs and all banks would be interoperable right from start, and in addition, the Bank of Ghana would be able to monitor the flows directly from its offices and would thus be able to have a strong control over the network.
5. Sometime in 2016, we wanted to facilitate the development of a comprehensive and properly regulated national payments systems infrastructure, so that the market does not develop piecemeal or with inconsistent standards. Through a selective tender, we requested the successful vendor to supply, implement, own and operate an integrated and interoperable Mobile Payment Systems Infrastructure (MPSI), as a turn-key solution project – i.e., all components must be supplied and/or integrated by the vendor to create a fully tested, working system meeting our requirements.
6. The overall objective of the project was among others; to establish an infrastructure to support interoperable mobile payments in Ghana that provides an interbank conduit and clearing and settlement of mobile payments among different issuers. It also aimed to provide assurance for financially and legally secure settlement of low-value electronic payments, via the existing RTGS system for reliable, safe, and integrated payments and settlement system for all payment types.
7. The project also sought to reduce dependence on cash and paper payment
instruments, as a means of improving the security and operational efficiency of the overall payment system; reduce operational costs of processing payment transactions to participants and also introduce new
revenue streams through new payments products and services, such as
mobile direct debit services, mobile direct credit service as well as electronic bill presentment and payment using mobile payment solutions; provide convenience, enhanced service offering greater range of services to bank customers and improving the speed of availability of funds to
8. Finally, the project was aimed to facilitate the integration of payments originating from core banking systems and third-party transaction originators such as mobile money operators, internet payment gateways, and payment aggregators.
9. The total cost of implementing the project and the cost of on-going support was to be consistent with profitable operation at the volume of transactions to be processed and with reasonable assumptions about the acceptable level of fees in the Ghanaian market. This was to ensure that the system was able to generate enough revenue to recover the operational cost and also recover the implementation costs within a reasonable period without hampering Ghana’s financial inclusion agenda.
10. It was made clear that the successful tenderer would be awarded a contract to supply and implement MPSI, including hardware, systems software, and application software at the tenderer’s own expense, and own and operate the delivered system. BOG would use the system as a monitoring tool for payment system oversight. Also, the successful tenderer would provide the technical training needed for staff of participating institutions, namely; BOG, banks and mobile money operators (MMOs) to be able to use and support the MPSI.
11. Specifically, the following were required to be performed:
- Overall integration of mobile payments platform of the MNOs in Ghana.
- Supply, installation, and integration of application software, hardware, infrastructure, operating systems, database and middleware supporting an operational MPSI pilot.
- Supply of software, hardware, and implementation of a functional interoperable mobile money ecosystem.
- Integration with Ghana's clearing and settlement facilities consisting of CCC (Cheque codeline clearing with truncation. This system enables the electronic clearing of cheques with cheque images), Automated Clearing House for bulk debit and credit funds transfers (ACH), The Real Time Gross Settlement system for high value payments (RTGS), CSD (Central Securities Depository) and gh-Link.
- Integration with the Participant Banks, Mobile Money Operators (MMOs), and the existing Front End Processors (FEPs).
12. The bid submitted by SIBTON SWITCH was assessed in line with due process to be the most responsive and hence the company was awarded the contract. There were no infractions in the tender process nor any laws violated
. Indeed, an investigation by the Economic and Organized Crime Office (EOCO) in 2017 did not find any infractions with the procurement process.
13. Unfortunately, the execution of the contract by SIBTON SWITCH has been frustrated since 2017, and my information is that this has become a subject of international arbitration.
14. If at all, it is the current government that has actually spent $4 million to
build a simple system that is far less in scope than what was intended to be built by a private sector operator. Certainly, the amount of $4 million could not have been financed by the Ghana Interbank Payments and
Settlements Systems Ltd (GHIPSS), because this subsidiary of BoG did not have the financial resources.
15. I want to remind all that the Bank of Ghana (BoG) is an operationally independent body, with a clear mandate that has nothing to do with any political party. Therefore no such comments should draw in the government of the day, which had no role in the transaction pursuant tothe Bank of Ghana (Amendment) Act 2016, Act 918.
DR. ABDUL-NASHIRU ISSAHAKU