WABA Explains Collapse of Ecowas Travellers Cheque

INADEQUATE publicity and campaign, abuse by travellers as well as bureaucratic bottlenecks have been identified as factors responsible for the poor performance of the ECOWAS Travellers Cheque (ETC) .

the president West African Bankers Association (WABA), Nigeria chapter, Mr. Daniel Abass, in an interview with vanguard explained that various factors such as inadequate sensitisation of the public, compliance with procedure regarding encashment, sale and redemption of the ETC were responsible for the dismal performance of the cheques.

He stated that prior to the introduction of the ETC, WABA had advised that for it to be successful there is need for massive public awareness in order to ensure adequate public knowledge and patronage for the ETC. "This advice was not however heeded, as the ECOWAS governments went ahead with the scheme without adequate sensitisation;" he added.

In addition to this, Abass observed that the procedure regarding the enhancement and redemption of the etc was not adequate stating that this was because adequate time was not devoted to the preparatory works prior to the introduction of the cheques.

UNINTENDED DERIVATIVE USE

According to him, another factor responsible for the eventual demise of the ETC was abuse by travellers.

He observed that rather than use the cheque for travel purposes, some travellers had converted it to a trading instrument hence holding huge volume of up to $100,000 worth of ETC in their possession, a situation which made receiving banks to become cautious.

In addition to this banks that embraced the cheque have not had their money refunded by the various Central Banks in the ECOWAS region, a situation which eventually killed acceptability of the ETC.

The ETC was introduced in 1998 to relieve travellers across the borders of ECOWAS member countries, the risk of travelling with huge amount of cash. However since it was introduced, public patronage has been on the decline, as traders prefer to hold US dollars or the CFA currency which experts say are readily convertible than the ETC.

Also recently it was reported that counterfeit copy of the cheques was in circulation in some West, African countries.

Inspite of these problems Abass averred that the association believes all hope is not lost saying that, all that is needed to revive the cheque was to evolve measures to correct the problems militating against acceptance and patronage of the ETC.