Mastercard and Chams Dispute Provides Insights into Why Nigeria’s National ID Card Scheme is Not Working
Identity management has been one of the biggest issues holding back Nigeria’s development across several industries. The National Identity Management Commission (NIMC) is saddled with the responsibility of bringing about a standard national identity card system.
But despite having a relatively developed financial system and a thriving tech sector, Nigeria is still yet to develop a lasting solution to its identity management issues. Many Nigerians simply don’t understand why.
Presently, an interesting controversy is providing us a bit of insight into why the national identity card scheme has been so stagnant and painfully unproductive.
The dispute between Chams and Mastercard
One of the leading developers of the identity scheme, Chams PLC is accusing MasterCard of breach of contract relating to the scheme, resulting in a loss of over $100 million. The Nigerian company made the accusation recently in a letter to Nigeria’s Vice President, Yemi Osinbajo, who is the head of the Presidential Enabling Business Environment Council (PEBEC).
In the letter, Chams reveals that the previous administration of President Olusegun Obasanjo had contracted it to develop the country’s identity management system in 2007.
However the NIMC was not looking to develop “ordinary” national identity cards though. The government agency wanted a holistic solution that also incorporated payment features.
As a result, Chams later signed an agreement bringing Mastercard as its technical partner in the project. Another agreement was reached in 2012 outlining the responsibilities of both parties. The agreement “contained several clauses including non-disclosure and non-compete clauses,” they letter to the vice president says.
“Chams exposed the entire architecture to MasterCard while working jointly to integrate MasterCard’s payment functionalities into the architecture of the National ID project. In the course of these developments, MasterCard received confidential information from Chams as contemplated under the CBA.”
But Mastercard soon after broke the agreement by signing a direct deal with the NIMC instead. This move meant Mastercard could go ahead to develop the payments technology without any input from Chams.
Meanwhile before this, Chams had raised N11 billion from the Nigerian Stock Exchange. The company also worked hard to secure various payments licenses from Nigeria’s CBN. From prepaid card issuance to POS deployment, Chams had heavily invested in the NIMC led identity management scheme.
But after Mastercard breached its contract with Chams, other technical partners began to sign direct deals with the NIMC too.
In an interview in late April 2019, Chams founder, Demola Aladekomo alleged that the NIMC “stole our technical partners, our design, intellectual property and staff. After stealing from me, they started implementing it themselves.”
By 2014, the NIMC announced the launch of the MasterCard Identity cards. It said the card was “NOT a glorified payment Card, but a National Identity Card offering a myriad of functions of which, one is payment.”
These moves ultimately shattered the finances of Chams and nearly led to its collapse. It ultimately reduced the role of the company and fragmented the process severely. It only became profitable again quite recently.
Dispute offers possible clue as to why you don’t have a national ID card
These issues explain serious reasons why the NIMC has been unable to deliver a viable identity solution for the country.
Importantly, the bidding process for the National Identity card had been concluded in 2007, with Chams as the preferred bidder. Card enrolment exercise had already began by 2010 and card issuance started in 2013. But the plan of signing on new partners in 2012 meant there was little time for the different new players to develop a viable solution.
This no doubt could have affected the proper implementation of the national database scheme.
Meanwhile, Chams, the company leading the implementation, was already neck-deep in debt, the other new firms would have had to handle implementation.
But nearly ten years after the first card enrolment exercise began, millions of Nigerians are yet to get the proper National ID cards.
And things look far from settled.
The latest wrangling between Chams and Mastercard pits two of the biggest players in the identity card scheme. Unless the dispute is resolved quickly, it may lead to possible litigation, which could in turn affect implementation of the exercise even further.
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