The African Development Fund (ADF) has approved $3.9 million grant to finance the upgrade of Liberia's payments infrastructure and systems.

The project’s primary objective is to strengthen the payments ecosystem in Liberia for increased efficiency and to foster growth and innovation.

It targets the automated cheque processing and automated clearing house and real-time gross settlement systems, which ADF says, form the backbone of payments processing in the country’s financial sector.

Also, the project will see the upgrade of the Central Bank of Liberia’s main data centre and disaster recovery sites as well as support initiatives to drive financial inclusion.

The ADF funding comes at a time Liberia’s financial sector is suffering from a number of challenges including inadequate ICT and last mile reach infrastructure

Existing payments infrastructure was deployed in 2016 with help from the African Development Bank, and has served the country for the last six years, but require urgent upgrading, says the ADF.

Moreover, ADF says the project is expected to “maximise potential to strengthen the financial sector, build financial stability, bridge the financial inclusion gap and facilitate integration in the region.”

According to the ADF, the planned project will also directly impact the roll-out of the proposed National Electronic Payments Switch (NEPS) system targeted at the retail market where the greatest exclusion occurs.

It says: “With the NEPS project approved by the World Bank in 2022 and its implementation underway, the proposed project is critical to efforts to improve financial inclusion in Liberia, currently standing at 44.2% (Findex 2021), and reach to disenfranchised populations including youth, women, smallholder farmers, micro small and medium enterprises, and other rural populations.”

Implementation of the new project will commence in June 2023 and will be executed by the Central Bank of Liberia working together with banking and non-banking institutions.

“The modernisation of Liberia’s payments infrastructure and systems to improve payments efficiency will not only strengthen the formal financial sector, but contribute to greater financial stability and improved private sector development,” says Benedict Kanu, African Development Bank country manager for Liberia.