The African Development Bank Group and the government of Sao Tome and Principe have signed a $3.2 million loan agreement.
Basically, it is targeted at upgrading the nation’s national switch payment system.
The $3.2 million loan agreement will aid the clearing and settlement of country wide high-value and retail payments.
Also, the upgrade will allow for automatic Real Time Gross Settlement (RTGS) modules and Automated Clearing House functionalities.
According to the nation, this will strengthen the clearing and settlement of payments.
Through RTGS, high-value transfers are settled in the Central Bank in real time. This reduces liquidity and credit risks within the system.
Funds From The Nigerian Trust Fund
The upgrading will allow for the surge of digital payment. Also, it will support mobile money and other digital services.
The Board of Directors of the Bank approved the loan on March 8, with funds to be disbursed from the Nigerian Trust Fund.
The Fund is one of the Bank Group’s arms which assists development efforts of the Bank’s low-income regional member countries requiring concessional financing.
This funding will supplement an African Development Fund grant of $2 million made in 2017, to support the country with state-of-the-art Automatic Transfer System (ATS+).
The African Development Fund is the Bank’s main concessional lending window.
Furthermore, the agreement was signed on March 23, 2023, during a brief ceremony attended by Sao Tome and Principe Minister of Planning, Finance and Blue Economy, Ginésio da Mata.
Also at the event was the Bank’s country manager for Angola and Sao Tome and Principe, Pietro Toigo.
Commenting on the signing, Ginésio da Mata said: “This fund will facilitate the financial inclusion of the population and further digitalization of the financial services”.
On his part, Toigo said” “We are delighted with the support of the Nigerian Government and the determination of Sao Tome and Principe to integrate its financial system in the continental and global economy”.
