The Federal Government of Nigeria has unveiled plans to develop a continent-wide payment card that would allow direct transactions between African currencies, bypassing the US dollar. Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed the initiative during a meeting with a Mastercard delegation in Abuja on Tuesday.
Eliminating the Dollar as an Intermediary
Oyedele emphasized that Africa has a unique opportunity to modernize its payment infrastructure to enable direct settlement between its currencies, reducing transaction costs across the continent. He stated: “Africa has a unique opportunity to modernise its payment infrastructure; we need to stop depending on foreign currencies as an intermediary for making payments.”
The proposed pan-African payment card would facilitate transactions directly from one African currency to another—for example, from the Nigerian naira to the Kenyan shilling or the South African rand—without requiring conversion to US dollars. Currently, many intra-African transactions are routed through the dollar, leading to additional costs and currency exchange risks.
Boosting Intra-African Trade Under AfCFTA
The initiative aligns with Nigeria’s goals under the African Continental Free Trade Area (AfCFTA) to enhance economic integration. By making cross-border payments cheaper and more efficient, the card is expected to stimulate intra-African trade and business operations. Oyedele noted that companies like Mastercard could help realize this vision and better connect Africa from a payment and financial perspective. He added: “I can assure you if we work together, we can make that African payment card a reality, and also deepen consumer finance.”
According to the minister, the card would reduce the reliance on the dollar as an intermediary, lowering transaction costs and exchange rate risks for businesses and individuals across the continent.
Expanding Consumer Credit in Nigeria
In addition to cross-border payments, Oyedele urged Mastercard to expand consumer credit access in Nigeria, citing low credit card usage relative to the size of the economy. He said: “Consumer credit usage remains too low, especially with respect to credit cards, for an economy of our size, and again with our growing population. We will encourage Mastercard to work with relevant stakeholders to grow consumer finance in Nigeria.”
Oyedele also highlighted Nigeria’s role as a hub for fintech innovation in Africa, noting that five of the nine African fintech unicorns are based in the country. He remarked: “Our fintech sector is quite developed, but we know that we can do much better. We can be much bigger, and the government is ready to continue to create an investment-conducive ecosystem.”
Central Bank Moves to Protect Bank Customers
In a related development, the Central Bank of Nigeria (CBN) has directed banks and other financial institutions to submit monthly reports on failed electronic transactions across all digital platforms. Under the new requirement, Chief Compliance Officers and Heads of Information Technology must jointly compile and submit electronic reports detailing all failed transactions originating from or terminating within their systems. This move aims to enhance transparency and protect consumers in the digital banking space.
