Feature/OPED
PIA: Pollution and Host Communities
By Jerome-Maeario Utomi
Like every new invention which comes with opportunities and challenges, the passage by the National Assembly and signing into law of the Petroleum Industry Bill about two years ago by the President Muhammadu Buhari-led federal government, after about 17 years of protracted back-and-forth debates, was greeted with mixed feelings. While some hailed the development, others welcomed it with scepticism.
Aside from the belief that the coming of PIA will make innovation possible within the petroleum sector, those who expressed happiness about the coming of the Act predicated their joys on the fact that the provisions, as sighted in PIA, will assist straddle the middle ground in the nation’s petroleum sector which has for a very long time manifested, proved to be a sector with neither primed nor positioned potentials.
Supporting this assertion is the graphic description by PIA advocates of how the new Act will locate, harmonize and strategically engineer prosperity among the operators of the up, mid and downstream sectors of the oil industry while turning the host communities into a zone of peace and democratized development via the 3% allocation to the host communities as captured in Chapter 3 of the Act.
In the opinion of this piece, this joy expressed by stakeholders for reasons qualifies as apposite, especially when one commits to mind the fact that for decades, the operational templates of the players within the industry, particularly the International Oil Companies (IOCs), have for decades been reputed for non-compliance to set rules and devoid of international best practices.
In fact, industry watchers have, at different times, and places argued that before the advent of PIA, the sector was confronted by the following weaknesses; the existence of multiple but obsolete regulatory frameworks which characterize the oil and gas exploration and production in Nigeria.
Secondly, the federal government failed to get the nations’ refineries back to full refining capacity. Thirdly, the Petroleum Ministry’s inability to get committed to making IOCs adhere strictly to the international best practices as it relates to their operational environment.
Fourth and final is the non-existence of clear responsibility/work details and action plans for government agencies and parastatals functioning, monitoring/regulating the sector.
The above failures have, as a direct consequence; cast a long dark shadow on both the ministry and the sector.
To further explain these points beginning with the first challenge, it is worth noting that the business of crude oil exploration and issues of oil production in the country is regulated by multiple but very weak laws and Acts- of which most of these laws are not only complicate enforcement but curiously too old-fashioned for the changing demands of time. Thereby, creating loopholes for operators, especially the IOCs, to exploit both the government and host communities.
Some of these laws/Acts in question operated for over five decades without achieving purposes, and they include but are not limited to; the Petroleum Act of 1969, The Harmful Waste (Special Criminal Positions etc), Act 1988, Mineral Oil Safety Regulation 1963, Petroleum (Drilling and Production) Regulation 1969 (Subsidiary Legislation to The Petroleum Act), The off-shore Oil Revenue (Registration of Grants)Act 1971, Oil in Navigable Act 1968, Petroleum Production and Distribution (Anti Sabotage) Act 1975, Associated Gas Re-injection Act 1979, Associated Gas Re-injection (continued Flaring of Gas) Regulation, Associated Gas Re-injection (Amendment) Decree 1985, Oil Pipeline Act Chapter (CAP) 338, Laws of the Federation of Nigeria (L.F.N.) 1990, and Gas Flare prohibition and punishment) Act 2016 among others.
Even as the above remains lamentable, facts have since emerged that instead of providing the anticipated legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry and the host communities, the Petroleum Industry Act (Act), like the other failed laws that it came to replace, has contrary to expectation become different things to different peoples.
To many, PIA is not only an evil wind that blows nobody any good but a toothless bulldog that neither bites nor barks. To others, it is but is a palliative that cures the effect of sickness while leaving the root cause to thrive.
To the host and impacted communities, the Act has become a first line of conflict between crude oil prospecting, exploration companies and their host communities. It is a law that has come to steal, kill and destroy. Members of this group have come to a sudden realization that nothing has changed.
Without going into specifics, concepts, provisions and definitions, there is also greater evidence that points to the fact that the underlying premise behind PIA enactment has been defeated, the eliciting reason for concern that what is currently happening between oil companies and their host communities may no longer be the first half of a reoccurring circle, but, rather the beginning of something negatively new and different.
Take, as an illustration, if PIA is fundamentally effective and efficient, why is it not providing a strong source of remedy for individuals and communities negatively affected by oil exploration and production in the coastal communities? If these frameworks exist and have been comprehensive as a legal solution to the issues of oil-related violations, why are the IOCs operating in the country indulging in selective implementation of the Act?
Why is the Act not enforced by the federal government and other relevant agencies? Why are these hosts and impacted communities still suffering at the hands of the crude oil exploration and production companies operating in the Niger Delta region?
While answers to the above questions are expected, this piece, however, believes that there are reasons why these issues raised about PIA failures and failings cannot be described as unfounded.
The facts are there and speak for it.
On 28th of March 2023, the people of Kantu/Odidi, host communities to Odidi Flow station, OML 42 in Gbaramatu kingdom, Warri South West Local Government Area of Delta State, staged a peaceful protest against the non-implementation of PIA.
While calling for holistic repair works on the Trans Forcados Pipeline (TFP), which runs through OML 42 in Warri South West LGA to Forcados Terminal in Burutu LGA of Delta State, the protesting communities gave the operators a 7-day ultimatum to commence genuine implementation of the PIA process and payment of the 3% of 2022 operating expenses as stipulated by the PIA with immediate effect to enable the communities to resume implementation of developmental projects in the communities, warning that failure to do so may lead to the shutdown of operational activities in the OML 42 Asset.
Lamenting that the TFP pipeline was constructed in the early 1960s and has outlived its lifespan long ago, leading to continuous pollution of the environment and destruction of the ecosystem, creating hardship for the locals, the communities stressed that TFP is one of the major pipelines destroying the environment because it has expired and cannot withstand the pressure of crude oil transported through it.
They, therefore, demanded full replacement of the said pipeline instead of the sectional repair works being planned by NEPL/NECONDE without recourse to its negative implications on communities and the environment, particularly since sectional repair works will not stop further leakages.
Kantu/Odidi protest occurred at a time when the dust raised by the 14 days ultimatum/threat issued to another oil company by the oil-rich community of Tsekelewu (Polobubo) in Warri North Local Government Area of Delta State was yet to settle.
In that particular ‘event’, the people of Tsekelewu (Polobubo) also threatened to shut down ongoing exploration activities of Conoil Producing Limited if the company failed to reach a definite agreement with the community on the implementation of Chapter 3 of the Petroleum Industry Act (PIA) for the Tsekelewu bloc of communities, supports this assertion.
The Host Community lamented that they adopted the option due to the seemingly snobbish attitude of the management of Conoil Producing, as the company’s management had refused to honour letters asking for a meeting with the TCDA on the issue of the PIA implementation.
Away from the persistent highhandedness of the IOCs, this piece is also of the position that PIA is as weak, defective and insufficient as the laws/Acts it was enacted to replace when it comes to pollution prevention, monitoring and control within the sector.
In fact, it will not be characterized as an overstatement to say that it shares the same body and spirit with the now rested Harmful Waste (Special Criminal Positions etc), Act 1988. The major defect with the referenced Act was signposted in its definition of harmful substance based solely on its impact on human beings and does not include its impacts on the environment and animals.
It focused only on the commission of any action or omission by persons without lawful authority. Thus, where an organization has a license to store waste resulting from production, they are seemingly omitted from the ambit of the Act, but the law failed to take into consideration the inadequate storage or inadequate waste management system by licensed firms or groups. Such failure or oversight is glaring and inherent in PIA.
Adding context to the colossal damage harmful substances arising from crude oil production have caused the nation, the National Oil Spill Detection and Response Agency NOSDRA reports show that oil spill incidents occurred 921 times in 2015, resulting in a loss of 47,714 barrels of oil, the highest within the period under review. In 2016, 688 cases of oil spills occurred, culminating in a volume of 42,744 barrels of oil. In 2017 and 2018, 596 and 706 cases of oil spills occurred and resulted in the spillage of 34,887 and 27,985 barrels of oil, respectively. Oil spills occurred on 732 occasions, spewing 41,381 barrels of oil in 2019, and 455 cases were recorded in 2020 with 23,526 barrels of oil. In 2021, companies reported 388 incidents, resulting in 23,956 barrels of oil.
The report also observed that oil spills should be closed off within 24 hours. And oil companies are required to fund the clean-up of each spill and pay compensation to local communities affected if the incident was the company’s fault.
Despite these beautiful provisions, there exists no appreciable instance within the period under review where such obligations to host communities have been obeyed. This piece also holds the opinion that under the PIA regime, no operator can claim a clean hand when it comes to obeying such laws in Nigeria, and the regulatory agencies have never bothered to hold them accountable for such failures.
Still on inefficiency and insufficiency of PIA provisions to effectively control pollution arising from crude oil exploration and production, this author, in a similar intervention, after a visit to the Niger Delta region, stated that a tour by boat of creeks and coastal communities of Warri South West and Warri North Local Government Areas of Delta state would amply reveal that the much-anticipated end in sight of gas flaring is actually not in sight. In the same manner, a journey by road from Warri via Eku-Abraka to Agbor, and another road trip from Warri through Ughelli down to Ogwuashi Ukwu in Aniocha Local Government of the state, shows an environment where people cannot properly breathe as it is littered by gas flaring points.
To a large extent, the above confirms as true the recently published report, which among other concerns, noted that Nigeria has about 139 gas flare locations spread across the Niger Delta both in onshore and offshore oil fields where gas which constitutes about 11 per cent of the total gas produced are flared.
Apart from the health implication of flared gases on humanity, their adverse impact on the nation’s economy is equally weighty. For instance, a parallel report published a while ago underlined that about 888 million standard cubic feet of gas were flared daily in 2017. The flared gas, it added, was sufficient to light up Africa, or sub-Saharan Africa, generate 2.5 gigawatts (Gw) of power or produce 50 million barrels of oil equivalent (boe) or produce 600,000 metric tonnes of liquefied petroleum gas (LPG) per year, produce 22 million tonnes of carbon dioxide (CO2), feed two-three liquefied natural gas (LNG) trains, generate 300,000 jobs, able to attract $3.5 billion investment into Nigeria and has $350 million carbon credit value’. This is an illustrative pointer as to why the nation economically gropes and stumbles.
Banking on what experts are saying, the major reason for the flaring of gases is that when crude oil is extracted from onshore and offshore oil wells, it brings with it raw natural gas to the surface and where natural gas transportation, pipelines, and infrastructure are lacking, like in the case of Nigeria, this gas is instead burned off or flared as a waste product as this is the cheapest option.
It, therefore, remains an ugly narrative that the choice to flare gas in the country is largely predicated on economies. This has been going on since the 1950s when crude oil was first discovered in commercial quantities in Nigeria.
While Nigeria and Nigerians persist in encountering gas flaring in the country, even so, has, successive administrations in the country made both feeble and deformed attempts to get it arrested.
In 2016, before the advent of PIA, President Muhammadu Buhari led administration enacted Gas Flare Prohibition and Punishment), an act that, among other things, made provisions to prohibit gas flaring in any oil and gas production operation, blocks, fields, onshore or offshore, and gas facility treatment plants in Nigeria.
On Monday, September 2, 2018, Dr Ibe Kachikwu, Minister of State for Petroleum (as he then was), while speaking at the Buyers’ Forum/stakeholders’ Engagement organized by the Gas Aggregation Company of Nigeria in Abuja, among other things, remarked thus; ‘I have said to the Department of Petroleum Resources, beginning from next year (2019 emphasis added), we are going to get quite frantic about this (ending gas flaring in Nigeria) and companies that cannot meet with extended periods –the issue is not how much you can pay in terms of fines for gas flaring, the issue is that you would not produce. We need to begin to look at the foreclosing of licenses’. That threat has since ended in the frames, as there has been little or nothing to get the threat actualized.
The administration also launched the now abandoned National Gas Flare Commercialization Programme (NGFCP), a programme, according to the federal government, aimed at achieving the flares-out agenda/zero routine gas flaring in Nigeria by 2020. Again, like a regular trademark, it failed.
Away from Buhari’s administration, in 1979, the then federal government, in a similar style, came up with the Associated Gas Re-injection Act, which summarily prohibited gas flaring and also fixed the flare-out deadline for January 1, 1984. It failed in line with the leadership philosophy in the country.
Similar feeble and deformed attempts were made in 2003, 2006, and 2008. In the same style and span, precisely on July 2, 2009, the Nigerian Senate passed a Gas Flaring (Prohibition and Punishment) Bill 2009 (SB 126) into law, fixing the flare-out deadline for December 31, 2010- a date that slowly but inevitably failed.
Not stopping at this point, the FG made another attempt in this direction by coming up with the Petroleum Industry Bill, which fixed the flare-out deadline for 2012. The same Petroleum Industry Bill (PIB) got protracted till 2021 when it completed its gestation and was subsequently signed into law by President Buhari as Petroleum Industry Act (PIA).
To win, the nation must borrow a ‘soul in order to raise a body’. They must seek solutions from the countries that are presently doing well in these areas where we are facing challenges. Part of that effort will require going beyond PIA to recognise the region as a special area for purposes of development. This demand cannot be described as unfounded as it is historically based, logical and factually supported.
Recall that the colonial government, long before independence turned down the demand for a Calabar/Ogoja/Rivers (COR) region/state. But identified the Niger Delta as a troubled spot and recommended to the then Federal Government that the region be regarded as a special area for purposes of development.
Without any shadow of a doubt, I hold an opinion that the federal government’s inability to treat the region as such set the stage for and nourished the restiveness in both the region and the sector.
Most importantly, the people of the region must be directly involved in the management of their resources.
Jerome-Mario is the programme coordinator (Media and Public Policy) at the Social and Economic Justice Advocacy (SEJA). He can be reached via [email protected]/08032725374.
By Shmuel Ja’Mba Abm
In a report filed by The Business Standard on August 8, 2026, India, the current BRICS chair, opposes a proposal for a common currency to counter the US dollar.
The Indian Commerce Minister, Piyush Goyal, told reporters in Jaipur, Rajasthan, northwestern India, after a two-day BRICS trade and industry meeting, that India was not in favour of a BRICS currency. He added that India did not support the introduction of any such BRICS currency scheme.
It is good these things are showing signs at this early stage of attempts by BRICS member countries to crystallise a research finding published by a British economist at Goldman Sachs, Jim O’Neil, in 2001.
None of the leaders and country members of BRICS ever conceived on record the formation of such an economic or political bloc until the research publication, which spurred leaders of the mentioned countries to marshal resources and begin a dialogue of formalisation.
The current membership that started involuntarily with just Brazil, Russia, India, and China as a concept published by a research economist, that later included South Africa, now has 10 members – Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, United Arab Emirates, and Indonesia.
Belarus, Bolivia, Cuba, Kazakhstan, Malaysia, Nigeria, Thailand, Uganda, Uzbekistan, and Vietnam are designated partner countries that participate in framework meetings without full voting rights.
Originally, the publication by Jim O’Neil wasn’t intended or proposed as a vehicle for the political grouping that has drawn the attention of the rest of the world, as mentioned members took a step further from the appraisal or assessment paper to coalesce into a political force overflowing its original boundaries today.
For the above reasons, the initial step of early contacts was to take advantage of things in common in member countries for the stimulation of economic growth and global prosperity. At that stage, suspicions were managed, and plans didn’t consider historical political differences and disagreements as grounds for suspicion or discontinuation of cooperation.
Of course, China and India had trust issues over decades of border disputes. And in the early stages of heightened escalations of the Russian-Ukrainian relationship when India offered to mediate and broker for ceasefire and eventual peace, Russia wasn’t sceptical but took steps to host the Indian Prime Minister, Narendra Modi.
But at the back of the mind of the Russian-Indian relationship, history was revealing about betrayals, especially after what the country endured in assassinations of leading members of the Indian National Congress, that killed Indira Gandhi and swept her son, Rajiv Gandhi, and thereafter ravaged the family dynasty with threats of violence.
These paved the way for the emergence of the Bharatiya Janata Party, a Hindu nationalist party, and its leader, Narendra Modi. The BJP is not directly responsible for the intimidation and violent campaign against the INC, a close former Soviet-era ally of Russia, but a beneficiary. There are grounds to suspect a frosty relationship with Russia, although concealed in diplomatic niceties and global market dynamics of cross-border business and trade.
India turned into the redistribution hub of Russian discounted grains and oil supplies as a third country, after sanctions were imposed on Russia in what Russia described as demilitarisation and denazification special operations in Ukraine.
India is considered by Western powers as a democracy. It was once a British colony, gaining independence on August 15, 1947. It is also a member of the British Commonwealth of Nations. On a normal day, it doesn’t add or take away anything. But under these circumstances, these are serious factors to consider in arriving at a decision.
Be it as it may, China and Russia have found their way out in world trade, bypassing SWIFT. China operates the Cross-border Inter-bank Payment System, whilst Russia is running the System for Transfer of Financial Messages (SPFS). India has IMPS and NEFT. In principle, these payment systems bypass SWIFT and the US dollar, nonetheless.
As the world waits to hear India back its dissenting views with supporting facts, world trade will never remain the same again.
Shmuel Ja’Mba Abm has extensive scholarly publications that establish him as a leading academic expert in regional geopolitical dynamics and diplomatic relations in Africa. Author of e-monographs on geopolitics, ethnic conflicts, and political philosophy.
Feature/OPED
What Dangote’s Reported $40bn Private-Placement Valuation Could Mean for Nigerian Investors, NGX
Dangote Petroleum Refinery could become an unusually large part of Nigeria’s stock market if its eventual IPO valuation is close to the roughly $40 billion implied by a recent private placement.
EBC Financial Group (EBC) highlights that this would value the refinery at about N54.63 trillion, using the Central Bank of Nigeria (CBN) Nigerian Foreign Exchange Market rate of N1,365.6856 per USD on August 7. Against the N158.513 trillion value of companies listed on the Nigerian Exchange (NGX) on the same date, adding the refinery at that value would produce a market worth about N213.14 trillion, with Dangote Refinery accounting for 25.6%.
This scenario assumes the full $40 billion equity value is reflected in NGX market capitalisation and other listed company values remain unchanged. At that size, movements in the company could become highly visible across the Nigerian equity market, although its actual influence on NGX indices may depend on the shares available for public trading and the relevant index rules.
David Precious, Senior Market Analyst at EBC Financial Group, said: “If Dangote Refinery entered the Nigerian Exchange at close to a $40 billion valuation, it could account for roughly one-quarter of the resulting NGX market value. If that valuation is difficult to support, few shares are available for public trading, or investors need to reduce other Nigerian holdings to participate, the effects could extend across Nigeria’s equity market, including existing NGX-listed companies and their shareholders.”
A Private Transaction Can Indicate Value, but Public Investors Need Financial Evidence
Based on the private transaction, $40 billion provides an indication of Dangote Refinery’s value, but it does not establish the eventual IPO price. Details published on August 4 said a $2.5 billion private placement for a 6% stake implied a valuation of roughly $40 billion. The proposed initial public offering (IPO) was reported to target about $5 billion, while the eventual IPO valuation and percentage offered to the public were not disclosed. This is important as a private transaction may produce a different valuation from the price a broad group of public investors is prepared to accept.
For context, public equity market values cited alongside the transaction were about $12 billion for Türkiye’s Tupras and $16 billion for US-listed HF Sinclair. The Dangote figure is about 3.3 times Tupras and 2.5 times HF Sinclair. They are not direct comparisons because profitability, debt, operations and growth plans differ. The gap nevertheless increases the need for audited earnings, cash flow, debt and investment plans that explain what supports the higher valuation.
The reported $5 billion fundraising target is equivalent to about N6.83 trillion at the August 7 exchange rate, or approximately 4.3% of the N158.513 trillion existing NGX market value. Proposed $5 billion raise. If new Nigerian or foreign money funds the offer, the pool of capital invested in Nigerian equities could expand. If investors sell current holdings to participate, capital could instead move away from other listed companies.
Publicly Tradable Shares and New Investment Could Shape the Wider Market Impact
NGX rules show why total company value does not tell investors how much stock they can actually trade. Main Board companies can qualify through either 20% public ownership held by at least 300 shareholders or publicly tradable shares worth at least N20 billion. The Premium Board value alternative is N40 billion. Holdings controlled by promoters, directors and close relatives, government, or strategic investors owning at least 5% are excluded from qualifying public shares.
This means a company worth tens of trillions of naira could still have a much smaller amount of stock available for regular trading if ownership remains concentrated. The key issue is therefore how much of Dangote Refinery becomes accessible to public investors and how widely those shares are held.
Regional investment could also affect the outcome. Details published on 4 August indicated engagement involving South Africa, Kenya, Egypt, Ghana and Rwanda, including possible Kenyan participation of up to $500 million, although no allocations were confirmed. The Johannesburg Stock Exchange separately said Dangote Group had shown strong intent to pursue a South African listing after Nigeria. Regional participation in the Nigerian offer could bring new capital directly into Nigerian equities. A later South African listing could broaden access but would not itself increase money raised through the Nigerian IPO.
Pension funds face the same question of capital allocation. The National Pension Commission (PenCom) waived the usual existence, profitability and dividend requirements so Pension Fund Administrators can consider the IPO, while retaining internal investment policies, risk-management requirements and duties to contributors and retirees. PenCom Circular on Dangote Refiner. PenCom states that the dispensation is exceptional, one-off and specific to this proposed IPO.
Pension funds held N5.907 trillion in domestic ordinary shares at the end of June, compared with the offer’s approximately N6.83 trillion equivalent. This does not imply pension funds would finance the offer. It shows why managers must consider exposure to one company and whether participation requires reducing other investments.
Precious added, “Dangote being listed could become a turning point for Nigeria’s equity market if it brings wider public ownership and additional African capital. Investors still need clear evidence supporting the valuation, clarity on how much of the company they can trade and an explanation of where the money raised will go. Those answers will determine whether the listing expands the Nigerian equity market or concentrates more investment around one company.”
An approved prospectus should clarify the valuation, shares offered, public ownership and use of proceeds. The Securities and Exchange Commission (SEC) said on June 23 that no IPO application had then been filed or approved and ordered unauthorised pre-marketing to stop. Details published on 4 August later said an IPO application had been submitted, with regulatory approval expected in the following weeks. Until final terms are disclosed, the test for Nigeria is whether the listing combines a supportable valuation with broad public ownership and genuinely additional investment.
Feature/OPED
Moving the Stablecoin Conversation From Hype to Utility in Africa’s Next Payments Evolution
By Rajat Mishra
For much of the past decade, discussions around stablecoins have been dominated by cryptocurrency speculation. Increasingly, however, stablecoins are emerging as practical financial infrastructure for moving money across borders, managing liquidity and improving payment efficiency.
The real opportunity lies not in choosing between traditional finance and digital assets, but in building an integrated financial ecosystem where both work together to improve efficiency, broaden financial access and deepen economic connectivity across the continent.
Despite significant advances in financial inclusion and digital payments, moving money across African borders remains far more difficult than it should be. Businesses continue to face challenges when making cross-border payments. Fragmented payment networks, multiple intermediaries, and lengthy settlement processes increase costs and create operational inefficiencies.
Remittance providers, the specialised financial services that millions rely on to send money home, face many of the same structural challenges. These providers play a critical role across the continent. In fact, 19 of Africa’s 54 countries receive remittance inflows equivalent to at least 4% of their GDP. Yet Africa remains the world’s most expensive region to send money to.
These challenges are not a reflection of remittance providers themselves, but of the fragmented banking and settlement infrastructure underpinning international money movement. Financial institutions must often manage liquidity across multiple disconnected currency markets while relying on complex correspondent banking networks and clearing systems. The result is higher costs, slower settlements, and capital that remains unnecessarily locked up.
One of the most immediate opportunities for stablecoins lies in improving cross-border settlement. Consider a Kenyan business importing goods from South Africa. Under traditional settlement models, payments often pass through multiple correspondent banking relationships, involve several foreign exchange conversions, and can take days before funds reach the intended recipient.
Stablecoin-enabled settlement rails have the potential to reduce much of this friction by enabling value to move more efficiently between financial institutions across markets. The result can be shorter settlement times, greater transparency and improved predictability for businesses operating across borders.
The benefits extend well beyond businesses. For millions of Africans working abroad, remittances remain a financial lifeline, helping families pay school fees, healthcare costs and daily living expenses. Yet sending money home often involves navigating a complex chain of money transfer operators, correspondent banks, and local payout partners, with each additional layer introducing costs and delays.
Stablecoins can help streamline the backend movement of funds between institutional participants, reducing settlement costs and improving efficiency across the value chain.
For end users, the advantage is simplicity. Recipients do not need to interact with, or even understand stablecoins directly. They continue to receive money through familiar, trusted channels, whether a local bank account or mobile money wallet, only faster and at a lower cost.
Beyond payments, stablecoins also address one of the less visible but most significant challenges in cross-border finance: liquidity management. Financial institutions operating across multiple markets must constantly ensure they have sufficient funds in the right currency, in the right jurisdiction and at the right time. Today, this often requires pre-funding accounts across multiple countries, a costly practice that traps large amounts of capital and limits financial flexibility.
Stablecoins introduce a new model for moving value across borders in near real time, enabling institutions to manage liquidity dynamically as demand arises. This can reduce the need for large pre-funded balances, improve treasury efficiency and free up capital that can be deployed more productively. Ultimately, these efficiencies can translate into faster settlements, lower costs, and better services for businesses and consumers alike.
However, the true value of stablecoins will not come from isolated blockchain networks operating independently of existing financial systems. Their long-term impact will depend on how effectively they integrate with banks, mobile money platforms, payment service providers and existing payment infrastructure. Interoperability will be critical to ensuring payment flows move seamlessly between systems, markets and currencies. The goal should be to strengthen and modernise today’s payment ecosystem, not replace it.
From experiment to infrastructure: what global moves are telling us
Some of the clearest signals that stablecoins are moving from experimentation to infrastructure are coming from card networks. Mastercard’s reported agreement to acquire BVNK, valued at up to $1.8 billion, points to a strategic investment in the settlement layer connecting stablecoin rails with traditional banking and reflects growing institutional confidence in stablecoin-enabled cross-border payments.
Visa’s expansion of stablecoin-backed cards through Stripe’s Bridge to more than 100 countries reflects a complementary strategy. Rather than acquiring infrastructure outright, Visa is leveraging its existing global network as the final distribution layer for stablecoin-funded payments.
The inclusion of African markets is particularly significant. It signals growing confidence that stablecoin-backed payment instruments can operate alongside, and in some cases complement, the mobile money ecosystems that already dominate wallet-based payments across much of the continent.
Taken together, these developments point to a broader shift. Card payment networks are moving from observing the stablecoin conversation to investing directly in the infrastructure that underpins it. For Africa, the implication is not that stablecoins will replace existing payment rails, but that success will increasingly belong to institutions capable of orchestrating multiple settlement rails – cards, bank transfers, mobile money and stablecoins- within a unified, interoperable ecosystem. Local market expertise, regulatory relationships and last-mile distribution will remain decisive competitive advantages.
Building for scale through trust and regulation
But despite their potential, stablecoins cannot operate outside the boundaries of regulated financial systems. Their long-term viability across Africa depends on clear regulatory frameworks, robust compliance standards and trusted infrastructure that supports transparency, risk management and consumer protection.
We are already seeing this evolution. In markets such as South Africa, institutions facilitating cross-border settlements must navigate increasingly sophisticated regulatory requirements, including approvals for certain offshore crypto-related activities. Globally, initiatives such as the OECD’s Crypto-Asset Reporting Framework (CARF) and expanded Travel Rule obligations are raising expectations around reporting, tax transparency and compliance.
These developments reinforce a simple reality: stablecoin infrastructure does not reduce compliance obligations. It raises the bar for governance, transparency and institutional risk management. The objective is not to bypass regulation, but to build interoperable payment systems that can innovate confidently within it.
From the edges to the plumbing
The stablecoin conversation is steadily moving beyond speculation and towards practical implementation. What once sat at the edges of the payments debate is becoming part of the plumbing of cross-border finance rather than a parallel system to it.
The question is no longer whether stablecoins have a role to play in payments. The question is where they deliver the greatest value. In Africa, that value is increasingly clear: faster settlement, improved liquidity efficiency and more connected cross-border commerce. The winners will not be those that replace existing financial systems, but those that successfully connect stablecoin rails with the banks, mobile money networks and payment providers that already power the continent’s economy.
For pan-African payment networks such as Onafriq, the priority is ensuring that emerging technologies complement the financial infrastructure businesses and consumers already trust, rather than introducing new layers of complexity.
The opportunity lies in connecting stablecoin settlement with banks, mobile money networks and payment providers, ensuring the benefits of this new infrastructure deliver tangible outcomes for African businesses and consumers.
Rajat Mishra is the CPO for Network Product & Deputy Group CPIO at Onafriq
