The scarcity of the Nigerian Naira occasioned by the Central Bank of Nigeria’s redesign and cash withdrawal policy has pushed Point of Sales transactions to N807.16bn in January 2023.
This is a 40.69 per cent year-on-year increase from the N573.72bn transactions that were done in January 2022. According to new data from the Nigeria Inter-Bank Settlement System, total cashless transactions in Nigeria rose by 45.41 per cent y-o-y to N39.58tn in January 2023.
The NIBSS monitors cashless transactions through the Nigeria Instant Payment System and Point of Sales terminals. Total NIP transactions for the period rose by 45.52 per cent y-o-y from N26.65tn as of January 2022 to N38.77tn as of January 2023.
The usage of electronic channels for transactions grew by 45.50 per cent y-o-y from 438.48 million times to 638 million times in the period under review. According to the NIBSS, there were 955,234 deployed PoS terminals in the country as of January 2022.
In 2022, the CBN announced a Naira redesign policy, and withdrawal limits, and encouraged Nigerians to adopt electronic forms of transactions.
The CBN said, “The maximum weekly limit for cash withdrawals across all channels by individuals and corporate organisations shall be N500,000 and N5m respectively.”
It added, “Customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.”
It explained that by 2025, the country will have a cashless and efficient electronic payment system infrastructure to service all sectors of the economy.
It said, “The use of cash will naturally slow with the ‘mobile first generation’, which will be economically active by 2025, hence one of the focuses of the PSV 2025 is enhancing the cashless policy of the CBN”, the document stated.
“As we implement the PSV 2025 agenda, the CBN will continue to ensure that the Nigerian payments system is widely utilised domestically, supports the government’s financial inclusion objectives, and meets international standards while contributing to overall national economic growth and development of Nigeria.”
Implementation of the policy has been postponed from its initial January 31 deadline to February 10. This new deadline is now subject to a Supreme Court judgement that has restrained the Federal Government from implementing its deadline.
Since the policy was announced, Nigerians have been subject to long ATM queues, buying of the naira, failed transactions, and problems with banks’ mobile applications.
Banking halls across the country have emptied as frustrated customers resort to other means of cash withdrawal. Riots have also broken out in various states of the country over naira scarcity, and angry Nigerians have attacked banks in some locations.
According to Victor Olojo, National President, Association of Mobile Money and Bank Agents in Nigeria, the cashless policy has forced people to go digital.
He said, “The cashless issue forced people to move to digital, to PoS. The policy contributed to that growth. People had to seek alternative channels aside from cash so this is expected. But this is not all from PoS withdrawals, we have merchants, businesses, and supermarkets. All other sectors using PoS to transact contributed to it.”
Commenting on how PoS operators have been accessing cash, he added, “Cash has also not been available to operators, most of them have shut down. And those who are getting cash are seeking it from other alternatives, marketplaces, filling stations, pharmacies, and they get it at a cost.”