The Central Bank of Nigeria ("CBN") in a bid to transform Nigeria's payment landscape, launched Africa's first Central Bank-led domestic card scheme – "AfriGo" on 26 January 2023. The launch comes shortly after the CBN published its Payment System's Vision 2025, which highlights the apex bank's target for the development of payment systems – particularly in a digital age.

According to the CBN Governor, the card scheme, created in collaboration with the Nigeria Inter-bank Settlement System, aims to "...plug the gap that has remained since the introduction of the cashless policy and... integrate the informal segment of our economy, reduce shadow banking, [and] bring more Nigerians into the formal financial services with an attendant diversification of deposit portfolio which will further strengthen the stability of the banking industry."1 The establishment of this scheme will also increase the CBN's access to financial data which will provide a greater understanding of consumer behaviour and assist with future decision making.

In addition, the AfriGo cards are expected to address certain challenges within the local banking system such as the high charges for issuance and maintenance of bank cards. According to the CBN, the launch of AfriGo will not hinder the operation of international card service providers – instead, it will promote the delivery of domestic services in a manner that is more innovative, cost-effective, and competitive.

It is without doubt that following the rise of e-banking platforms by fintech startups in Nigeria, the CBN's pioneering of this domestic card scheme is sure to serve as a catalyst for greater innovation for payment systems in the private and public sectors. The CBN has stated that AfriGo will improve financial inclusion as card charges will be reduced in comparison to those issued by foreign payment service providers. However, the cards will only be available to those with bank accounts and those without them remain unaccounted for. According to the World Bank's most recent Global Findex Database, only 45% of Nigerians are reported to own bank accounts2 . As such, it is not clear how the introduction of the AfriGo cards will substantially increase financial inclusion being that a notable portion of the population is "unbanked", thus having no use for debit/credit cards.

As stated by the CBN, the cards will cost less than N1,000 (one thousand Naira), which is the general rate for card issuance in most commercial banks; but it is yet to reveal the actual price of the cards. Furthermore, the CBN has not detailed how it intends to attain data sovereignty3, but compliance with Nigerian Data Protection Regulations is paramount and it is anticipated that the apex bank can achieve this.

This initiative is certainly commendable, with the CBN entering the card issuance market as the first government backed scheme in Africa. However, it must be said that the reality of the "unbanked" remains unchanged as they still do not have access to banking facilities, automatically excluding them from becoming beneficiaries of the scheme. Therefore, the practical steps for implementation of the domestic card scheme are eagerly anticipated alongside greater assurance of the infrastructural improvements that must be made for true financial inclusion.

Footnotes

1. The CBN Governor, Godwin Emefiele at the AfriGo Launch on 26 January 2023, CBN Unveils National Domestic Card

2. World Bank Global Findex Database 2021 Report Page16

3. Data sovereignty is the idea that digital information that has been converted and stored in binary form, is subject to the laws of the country the data is located in

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