Federal government seeks to cut dollar dependence as Mastercard CEO visits; wider credit access for businesses discussed

The Federal Government, through the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has proposed the creation of a cross-border African payment card to facilitate trade between African countries without using the United States dollar or other foreign intermediary currencies. Oyedele made this call on Tuesday during a meeting with Mastercard’s Chief Executive Officer, Michael Miebach, at the Presidential Villa in Abuja.

According to Oyedele, the current payment system in Africa requires that most card transactions between countries on the continent are routed through third-party currencies like the US dollar before final settlement. This process results in multiple currency conversions, higher transaction costs and increased foreign exchange exposure for Nigerian and African businesses. The minister stated that a dedicated African payment card would address these inefficiencies and support deeper integration under the African Continental Free Trade Area (AfCFTA).

Oyedele said: “We need to develop solutions that enable seamless payments within Africa using our local currencies. This will not only reduce reliance on external currencies but also promote intra-African trade and regional economic growth.” He noted that most transactions between Nigerian businesses and their counterparts elsewhere in Africa still go through international networks that settle payments offshore, putting additional pressure on Nigeria’s foreign reserves and exposing traders to exchange rate volatility.

Mastercard CEO Michael Miebach welcomed the proposal and reiterated his company’s commitment to supporting digital payment innovation across Africa. He said Mastercard was already working with several governments on similar projects to enhance financial inclusion and access to credit for individuals and small businesses.

The finance minister further stressed the need for broader credit access, particularly for small and medium enterprises (SMEs), which he described as vital engines of job creation in Nigeria. Stakeholders say improved payment infrastructure and affordable credit will help unlock new opportunities for Nigerian entrepreneurs, especially as AfCFTA implementation gathers pace.

As discussions continue, officials indicated that technical working groups from government and key private sector partners like Mastercard would meet in coming weeks to draft a roadmap for introducing an African payment card system. The move is expected to encourage more trade within West Africa and across the continent while reducing foreign exchange constraints faced by many Nigerian importers and exporters.

Source: https://guardian.ng/business-services/fg-backs-cross-border-african-payment-seeks-wider-credit-access/