Changes are ongoing as Nigeria gears ahead in what might prove to be the most important year in the country’s history since the 4th republic began in 1999.
One of the changes has been financial, as there has been an overhaul in the design of some currency notes, and today the official launch of a domestic card scheme. These two changes are reportedly to drive the country into a cashless society.
The announcement came from the Governor of the Central Bank Of Nigeria, Godwin Emefiele. He noted that the intention is not to replace foreign providers like Visa and Mastercard but to enhance the service for Nigerians.
Mr Emefiele explained at the launch of the card scheme “AfriGo” that the goal is to further reach corners of society that have proved too far for the existing foreign cards.
“The challenges that have limited the inclusion of Nigerians include the high cost of card services as a result of foreign exchange requirements of international card schemes and the fact that existing card products do not address local peculiarities of the Nigerian market,” he said.
This development isn’t unheard of, as countries like China, Russia, India and Turkey all have domestic card schemes. However one only needs to read that list to feel some restraint about the development. There are fears that this would give the CBN an unfair advantage in a democratic and highly capitalist state. Fears of corruption also abound, but more is the question of the need for the such scheme at all.
“The operations of international card service providers like Mastercard and Visa would not end, as AfriGo is meant to provide more options for domestic consumers in a “cost-effective and competitive manner”, Emefiele explained.
Nigeria, Africa’s biggest economy, has more than 200 million people and the majority still use cash because they live in rural areas where there are no banks.
To promote “financial inclusion” in remote areas, the central bank announced last week the launch of a cash swap programme introducing a redesigned version of the local currency, the naira.
Nigeria is the biggest economy in Africa, but a large number of its estimated 200 million populations still rely heavily on cash for daily transactions, especially in rural areas where the reach of technology is lower. While this gives some credence to the AfriGo card scheme, it is up to the Central Bank of Nigeria to take its plan into effect before it is justified.