According to the Bank of Ghana (BoG) website, Ghana's high value payment system, the Ghana Interbank Settlement (GIS) system is a real-time gross settlement system operated and overseen by the BoG. The main laws governing payment instruments, institutions, and clearing and settlement systems are the Bank of Ghana Act of 2002, the Payment Systems Act of 2003, and the Bills of Exchange Act of 1961. The BoG website asserts that these laws are in line with the Core Principles for Systematically Important Payment Systems (CPSIPS). A 2007 IMF report on Ghana observes that the country has embarked on a financial sector development plan with IMF assistance, which includes an upgrade of its payments system infrastructure. The reform encompasses using the latest technology, making ATMs interoperable, enabling the electronic processing of payments and the use of "smart cards," and making the payments system more widespread and accessible to rural areas. The BoG also mentions the agreement between the BoG and the Ghana Association of Bankers to establish the Ghana Interbank Payments and Settlement System (GIPSS) - an independent entity responsible for the management and oversight of the different aspects of Ghana's payment and settlement system infrastructure. However, there is insufficient information publicly available as to Ghana's actual compliance with the CPSIPS.

General Overview

A 2007 IMF "Selected Issues" report on Ghana observes that the country has embarked on a financial sector development plan which includes an upgrade of its payments system infrastructure. The reform encompasses using the latest technology, making ATMs interoperable, electronic processing of payments, the use of "smart cards" and making payments system more widespread and accessible to rural areas. In this context, the 2007 Article IV Consultation report by the IMF mentions that the IMF provided technical assistance to the BoG and the Ministry of Finance to improve Ghana's payment system in May 2005.

A 2007 Consultation Paper released by the BoG mentions that it is in the process of a major restructuring and modernization of Ghana's payments and settlement system infrastructure, especially with the implementation of a real-time gross settlement (RTGS) system for high-value payments. Supplementing the RTGS system, the BoG has also introduced a paper-based credit clearing system for low-value systems, which will soon be transferred to an electronic platform. Further, the 2007 Consultation Paper reports that the BoG is setting up a National Switch (E-ZWICH) that uses the Universal Electronic Payments (UEPS) technology and will integrate all existing bank switches so as to allow the interoperability of all automated teller machines (ATMs) and point of sale (POS) transactions in the country. The BoG is also introducing Codeline Check Truncation to allow faster check clearing; and an Automated Clearing House (ACH) for clearing electronic debits and credits. The Consultation Paper sets the time frame for the operation of these systems at the end of June 2008.

A 2007 Press Release by the BoG reports that the BoG and the Ghana Association of Bankers have agreed to establish the Ghana Interbank Payments and Settlement System (GIPSS) - an independent entity responsible for the management and oversight of the different aspects of Ghana's payment and settlement system infrastructure, including the RTGS System, E-ZWICH, National Biometric Card, Codeline Check Truncation, and ACH. The 2007 BoG Consultation Paper mentions that the GIPSS is a limited liability company. The GIPSS promises to make payments system in the country more efficient, secure, user friendly, cost-effective, accessible, and modern, and will include all banks as participants.

The BoG's 2006 Annual Report announced the implementation of the Second Phase of its Payment Systems Development Strategy - the National Electronic Payments System (NEPS) Project - which aims to make financial services fully electronic and more widely accessible. The NEPS Project will put into place all components of the infrastructure envisaged in the 2007 Consultation Paper. According to the BoG website, Ghana's high value payment system, the Ghana Interbank Settlement (GIS) system, is an RTGS system. The BoG is the operator and overseer as well as a participant of the payments system in Ghana. Other participants include all commercial banks, payments system infrastructure and service providers, and the banking public. The 2006 BoG Annual Report mentions that the volume of transactions through the GIS amounted to 93,103; and the value corresponded to Ghanaian Cedi (GHC) 474,154.4 billion. According to the BoG's 2006 Annual Report Ghana also has two major low value payment systems, the Check Clearing System and the Paper Credit Clearing System.

The BoG website notes that cash is the dominant means of payment, but this is being gradually replaced by cashless and electronic payment instruments. This trend started with the introduction of the MICR checks in 1997 and, as of 2007, checks dominate the non-cash retail payment instruments, accounting for 95 percent of all transactions both in volume and in value. Interbank credit transfers constitute the remaining 5 percent of transactions. ATM and debit card services are offered at the retail level, and there is also limited use of internet and telephone banking in Ghana.

The Principles

I. The system should have a well-founded legal basis under all relevant jurisdictions.

II

There is insufficient information publicly available as to Ghana's compliance with this principle. However, the BoG website states that the laws governing Ghana's payment system are in line with the Core Principles for Systematically Important Payment Systems (CPSIPS). The main laws covering payment instruments, institutions, clearing, and settlement systems are the Bank of Ghana Act of 2002, the Payment Systems Act of 2003, and the Bills of Exchange Act of 1961. Besides the laws, payments are governed by a variety of rules and regulations, including the Rules Governing the Operations of Clearinghouse. In addition, the Ghana Interbank Settlement (GIS) System's Terms and Conditions provide the contractual basis for the operation of the large value funds transfer system. According to the BoG website, the Bank of Ghana Act of 2002 confers upon the BoG authority over Ghana's payment and settlement systems in Ghana. It also makes the BoG responsible for "the promotion, regulation and supervision of payment and settlement systems; and the facilitation of the clearing of cheques and other credit instruments for banking institutions."

According to the BoG website, the Payment Systems Act of 2003 mandates that the BoG oversee and manage the payment systems. In the words of the Act, the BoG is empowered "to establish, operate, promote and supervise payment, funds transfer, clearing and settlement systems subject to such rules as it may publish; and to designate any other payment, funds transfer, clearing and settlement systems operating in the country, which the Bank considers to be in the public interest to supervise." The Act also contains principles of payment system transparency, sets the minimum obligations for financial institutions participating in the system. It establishes principles of finality and irrevocability of payments and mandates that electronic evidence is admissible in courts of law. The Act further sets out principles for dispute resolution and penalties.

The BoG website also mentions the Bills of Exchange Act of 1961, which is in the process of being amended by the Bills and Cheques Bill (currently still in draft form) to bring it in line with current international practices. Other relevant bills pending in Parliament are the Anti-Money Laundering bill and the Credit Reference Agency bill. The BoG's 2006 Annual Report mentions the repeal of the 1961 Exchange Control Act by the Foreign Exchange Act of 2006, which has resulted in a more open and liberal exchange and payments regime backed by a reformed statutory framework. Other relevant regulatory documents include the Rules Governing the Operations of Clearinghouse, which provide an operational framework for efficient clearing and settlement of payments, and the GIS's Terms and Conditions, which provide the contractual basis for the operation of the GIS.

II. The system's rules and procedures should enable participants to have a clear understanding of the system’s impact on each of the financial risks they incur through participation in it.

II

There is insufficient information publicly available as to Ghana's compliance with this principle.

III. The system should have clearly defined procedures for the management of credit risks and liquidity risks, which specify the respective responsibilities of the system operator and the participants and which provide appropriate incentives to manage and contain those risks.

II

There is insufficient publicly available information available as to Ghana's compliance with this principle. However, a 2007 Consultation Paper released by the BoG mentions that the GIS System, operated by the BoG, enables the settlement of payment orders "almost instantaneously" thereby "[reducing] systemic, payments and settlement risks" (p. 3).

IV. The system should provide prompt final settlement on the day of value, preferably during the day and at a minimum at the end of the day. (Systems should seek to exceed the minima included in this Core Principle.)

NC

A 2007 Consultation Paper released by the BoG mentions that the GIS System, enables the settlement of payment orders "almost instantaneously" (p. 3). However, there is insufficient information publicly available as to Ghana's compliance with this principle.

V. A system in which multilateral netting takes place should, at a minimum, be capable of ensuring the timely completion of daily settlements in the event of an inability to settle by the participant with the largest single settlement obligation. (Systems should seek to exceed the minima included in this Core Principle.)

II

See Pr. IV.

VI. Assets used for settlement should preferably be a claim on the central bank; where other assets are used, they should carry little or no credit risk and little or no liquidity risk.

II

See Pr. III.

VII. The system should ensure a high degree of security and operational reliability and should have contingency arrangements for timely completion of daily processing.

II

A 2007 Consultation Paper released by the BoG mentions that Ghana's GIS System, has enabled payments to be safe, sound, secure, and timely" (p. 3). However, there is little further publicly available information regarding Ghana's compliance with this principle.

VIII. The system should provide a means of making payments which is practical for its users and efficient for the economy.

II

There is insufficient information publicly available as to Ghana's compliance with this principle.

IX. The system should have objective and publicly disclosed criteria for participation, which permit fair and open access.

II

There is insufficient information publicly available regarding Ghana's compliance with this Principle.

X. The system's governance arrangements should be effective, accountable and transparent.

II

There is insufficient publicly available information as to Ghana's compliance with this principle.

A. The central bank should define clearly its payment system objectives and should disclose publicly its role and major policies with respect to systemically important payment systems.

II

There is insufficient information publicly available regarding Ghana's compliance with this principle.

B. The central bank should ensure that the systems it operates comply with the Core Principles.

II

The 2006 BoG Annual Report states that the central bank's oversight activities encompasses all the existing payment, clearing and settlement systems in the country, and includes monitoring and assessment as to their compliance with the BoG's operating rules and established standards. The BoG asserted that all systems under its oversight to be operating satisfactorily. It further announced its intention to revise the existing supervisory framework to meet the demands of the imminent overhaul of the payment infrastructure in the country. There is, however, little further information publicly available as to Ghana's compliance with this Principle.

C. The central bank should oversee compliance with the Core Principles by systems it does not operate and it should have the ability to carry out this oversight.

II

There is insufficient publicly available information as to Ghana's compliance with this principle.

D. The central bank, in promoting payment system safety and efficiency through the Core Principles, should cooperate with other central banks and with any other relevant domestic or foreign authorities.

II

There is insufficient information publicly available regarding Ghana's compliance with this Principle. However, the 2004 Annual Report of the BoG mentions that the BoG is a SWIFT shareholder and user group member, and in that capacity participated in two major activities organized by SWIFT in 2004 - the Africa Regional Conference held in Mauritius and the SWIFT International Banking Operations Seminar (SIBOS) held in Atlanta, Georgia. Ghana was also chosen as host of the 2005 Africa Regional Conference. (p. 44)