The Central Bank of Nigeria (CBN) has launched a new product called AfriGo, the first African Central Bank-led National Domestic Card Scheme. According to the CBN Governor, Godwin Emefiele, the domestic card scheme is expected to strengthen the national payments system, reduce shadow-banking and encourage the usage of electronic platforms in Nigeria. While the distribution strategy of AfriGo is not yet clear, Emefiele says the card will be accessible to all Nigerians.
At the virtual launch, Mr. Emefiele said that the apex bank had come up with this card to ensure that all online card transactions will now go through the Nigerian National Domestic System. He added that transaction charges on all cards will henceforth be paid in Naira, except for international transactions. “Your existing cards are fine. You can continue using them but given that charges by foreign cards are in dollars, we will no longer pay dollars for the charges on those cards. We will only pay dollars for charges on transactions that are done outside Nigeria. NIBSS, the CBN and Nigerian banks will work together to see how to segregate those transactions,” he assured. This is a relatively good idea but the timing couldn’t be worse.
At the moment, Nigerians are dealing with the inability to pay for overseas transactions with their bank cards. Worse off is their banks’ insistence that they can make pay in $ but there is a limit – $15 in some cases. Not many people have testimonies about the veracity of this limit. Unpaid subscriptions are piling!
While the financially literate among Nigeria’s population are divided on the quality of Godwin Emefiele’s economic and financial policies, a few things make it a meh idea.
As Twitter user, @tope_femi expresses in his tweet, cross border payments will be greatly affected because there is absolutely no word on how many merchants accept AfriGo card payments.
- Based on the above, the success or failure of a new card scheme depends largely on its acceptance by merchants and other entities that accept payments. If the card is not widely accepted, it will not be useful for many Nigerians.
- Okay, say merchants are willing to embed AfriGo as a payment infrastructure, not much technological or security information exists as to why it will be a better option and what
would gowent into developing the payment solution. Afrigo.org is a church mission website. The CBN and NIBSS website have no leads either. - The CBN claims that the AfriGo card will open more opportunities for the Nigerian economy to integrate the informal sector, but the argument has always been that the informal sector has a reality different from the formal, upwardly mobile sector. As such, if the structure of the card does not align with the reality of the informal sector, it may not be successful in this regard.
- Emefiele has said AfriGo will salvage Nigeria’s (over)dependence on forex but I reckon forex is important eitherway. There’s even the little matter of Nigeria funding her budget through Oil export which is sold in $$. If the implementation of the card leads to less transactions with foreign companies, it could lead to less foreign exchange for the country, which could negatively impact the economy.
- THE TIMING! Once inconvenience at a time, CBN!
I promise I am not trying to pick holes in this AfriGo project. Anything to be more Nigerian and use Made in Nigeria, but it has to be well thought out and of pristine quality. More so because Nigeria has the talent and the wherewithal – whatever that suggests.