Nigeria proposes pan-African payment card to bypass dollar for intra-Africa trade

The federal government has unveiled plans for a pan-African payment card that will allow direct transactions between African currencies. Finance Minister Taiwo Oyedele said the initiative, developed with support from Mastercard, aims to eliminate the need for intermediary currencies like the US dollar.

Oyedele disclosed the plan when he met with a Mastercard delegation in Abuja on Tuesday, June 23. According to him, Africa has the opportunity to revolutionise its payment infrastructure to enable direct settlement between its currencies and reduce transaction costs across the continent.

He said: “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 minister explained that the government intends to introduce a payment card which would facilitate transactions directly from one African currency to another, such as from Naira to Kenyan Shilling or Rand, without involving the dollar.

Under the current system, many transactions between African countries are carried out using the US dollar. A transaction from Ghana to Egypt might involve converting the local currency to US dollars, then back to local currency before conversion to Egyptian Pounds. This often results in additional costs and currency exchange risks.

The envisaged pan-African payment card is expected to make cross-border payments cheaper and more efficient, facilitating easier intra-African trade and business operations. This initiative aligns with Nigeria’s goals to boost economic integration under the African Continental Free Trade Area (AfCFTA).

The government also urged Mastercard to expand consumer credit access in Nigeria. Oyedele believes firms like Mastercard could help make the vision of a payment card a reality and better link Africa from a payment and financial perspective.

He added: “I can assure you if we work together, we can achieve this.”