The African Development Bank (AfDB) has loaned the government of Sao Tome and Principe, a Central African country, $3.2 million to upgrade its payment infrastructure. The loan agreement will allow Sao Tome and Principe to upgrade its national switch payment system, which supports the clearing and settlement of country-wide retail payments.
The upgrade will allow for real-time payments through Real Time Gross Settlement (RTGS) modules. With this loan, Sao Tome and Principe’s payment system will enable instant funds transfer, just like Nigeria’s instant payment infrastructure, the Nigerian Interbank Settlement System.
This innovation will increase the use of digital payment, mobile money, and other digital services. It will also lead to a reduction in liquidity and credit risks in the country.
The loan will be disbursed from the Nigerian Trust Fund. The trust fund is one of the AfDB’s arms and assists the development efforts of the bank’s low-income regional member countries that require concessional financing. This funding will supplement an African Development Fund grant of $2 million made in 2017 to support the country with a state-of-the-art automatic transfer system (ATS+).
The agreement was signed by Sao Tomé and Principe’s minister of planning, finance, and the blue economy, Ginésio da Mata, and the AfDB’s country manager for Angola and Sao Tome and Principe, Pietro Toigo. Speaking on the loan agreement, Ginésio da Mata said, “This fund will facilitate the financial inclusion of the population and further digitalization of the financial services.’’
Adding to de Mata’s statement, 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.”