The Federal Government of Nigeria has proposed the development of a Pan-African payment card. The ambitious initiative seeks to enable direct transactions between African currencies, effectively eliminating the need to route everyday payments through the United States dollar, the Euro, or other intermediary currencies.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, formally pitched this transformative idea during a strategic meeting with a high-level Mastercard delegation. The delegation, led by Mastercard Chief Executive Officer Michael Miebach, met with government officials at the Presidential Villa in Abuja to discuss the future of digital payments and financial infrastructure in Africa's largest economy.
The Cost of Dollar Dependency
For decades, the African payment ecosystem has been heavily fragmented and plagued by structural inefficiencies. Currently, the vast majority of cross-border card transactions between African nations are routed through a third currency, typically the U.S. dollar, before final settlement can occur. Even when a buyer in Lagos purchases goods from a supplier in Nairobi, the transaction virtually leaves the continent, gets converted into dollars, and is then converted back into the destination's local currency.
This convoluted process leads to multiple currency conversions, significantly higher transaction fees, delayed settlement times, and increased foreign exchange exposure for local businesses and consumers.
By introducing a unified payment card, the Nigerian government hopes to keep more value, transaction data, and settlement activity within the continent. “We hope that, for example, we have a payment card that you can use to pay from naira to Kenyan shillings, to South African rand, without a third currency. And we know you can make it possible,” Oyedele explained to the Mastercard executives. The proposed infrastructure aims to make cross-border trade cheaper, faster, and fundamentally less susceptible to the volatility of global financial markets.
Accelerating the AfCFTA Vision
This proposal aligns seamlessly with the broader objectives of the African Continental Free Trade Area (AfCFTA), a landmark agreement designed to create a single, frictionless market for goods and services across the continent. It also builds upon the foundational work of the Pan-African Payment and Settlement System (PAPSS). Launched in 2022 by the African Export-Import Bank (Afreximbank) in collaboration with the AfCFTA Secretariat, PAPSS is actively connecting African central banks to facilitate real-time, local-currency settlements.
In recent times, regional financial leaders introduced early iterations of pan-African cards to process payments entirely within Africa. The Federal Government’s push for a widely adopted, globally supported Pan-African payment card signals a strong desire to scale these solutions rapidly. According to industry estimates, Africa's cross-border payments market could reach an astonishing $1 trillion by 2035. Yet, the sector continues to lose billions annually to foreign exchange friction. Eliminating these bottlenecks is vital for the survival and growth of small and medium enterprises (SMEs), which form the economic backbone of the African continent.
Driving Financial Inclusion and Consumer Credit
Beyond eliminating the dollar premium on African trade, Minister Oyedele utilized the Mastercard meeting to strongly advocate for expanded consumer credit access within Nigeria. Despite the country's indisputable status as a leading technology hub currently hosting five of Africa’s nine prominent fintech unicorns, credit card penetration remains remarkably low across the general population.
“It is difficult, even for someone at my level, to get a credit card,” the minister candidly noted. He emphasized that wider credit access is not just a banking convenience; it is a critical macroeconomic tool that would stimulate domestic consumption, advance financial inclusion, and accelerate sustainable economic growth.
The ongoing structural reforms across Nigeria’s financial sector are actively laying the groundwork for a more integrated digital economy. Oyedele revealed that the government's aggressive push to formalize unregistered businesses is yielding measurable results. In recent months, over 10,000 informal businesses have been applying for formal registration daily. This rapid formalization creates a massive, untapped market for financial service providers to deploy innovative credit and digital payment solutions.
The Road Ahead
Responding to the government's proposal, Mastercard CEO Michael Miebach reaffirmed the global payment giant's long-term commitment to the Nigerian market, a region where it has operated extensively since 2011. He praised the Federal Government's ongoing economic reforms, noting that deliberate efforts to align fiscal and monetary policies are sending highly positive signals to global investors and network operators.
As Africa’s financial ecosystem rapidly matures, the transition toward true monetary sovereignty is accelerating. If successfully executed alongside global partners, a Pan-African payment card could serve as the ultimate catalyst ensuring that African wealth circulates within African borders while seamlessly connecting the continent's vibrant economies.
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