With effect from April 2, 2018, third parties such as contractors, consultants and suppliers who transact business with state institutions operating under the Ghana Integrated Financial Management System (GIFMIS) will no longer be paid manually with cheques.
Subsequently, the government has taken a decision to ensure that all ministries, departments and agencies (MDAs) which generate funds internally pay third parties through electronic fund transfers (EFT) which will enable them to receive payments electronically into the accounts of the owed entities.
The Finance Minister, Mr Ken Ofori-Atta, announced this in an address read on his behalf at a sensitisation seminar for heads of account and treasury officers of MDAs of IGF institutions.
He said to ensure the smooth implementation of the policy, the Controller and Accountant-General’s Department (CAGD) and GIFMIS, which is under the Ministry of Finance, had embarked on a hands-on training to keep them abreast of the EFT system.
Meanwhile, he said, all stakeholders, and in particular those institutions that had IGF, would be expected to collect system cheque books from the CAGD for internal use before the rollout of the policy.
The minister explained that the EFT was the electronic exchange and transfer of money either within a single financial institution or across multiple institutions through computer-based systems without manual or human intervention.
The Project Director of the Public Financial Management Reform Project (PFMRP), Dr Sani Abdulai, stated that benefits of the implementation of the EFT included prudence and efficiency, adding that the direct deposits would help eliminate the current practice involving manual and labour-intensive processes and disbursement of cheques, as well as the avoidance of the payment of bank charges.
He said the electronic system, which was user-friendly and involved less accounting works, made it easier for bank reconciliation, conserved time and also eliminated the incidence of the issuance of dud cheques.
The Director of Banking at the Bank of Ghana, Madam Paddy Dzodzomenyo, said the EFT happened when digital instructions were sent to the Bank of Ghana to move funds between two accounts, with the instruction given through a computer-based system of the payer (GIFMIS), which is interfaced with the Bank of Ghana.
She assured the participants of the readiness of the central bank for the success of the initiative.
In a presentation, the GIFMIS Component Lead of the PFMRP, Alhaji Siraj Tanko, said third party firms which transacted business with the 54 IGF agencies would be required to submit their bank account details on letterheads to the various agencies they provided services for for onward transmission to the GIFMIS Secretariat.
He said under the EFT, contractors and suppliers were encouraged to sign on to their bankers’ transaction alert scheme to get notification on the EFT from the GIFMIS Secretariat, notifying them of payments.