Nigeria will soon start restricting ATM withdrawals to just $45 a day as part of a push to move the country towards a cashless economy.
The policy, which will also apply to banks and refunding purchases, follows the launch of the West African nation’s newly designed currency notes to control the money supply.
FILE – Customers use automated teller machines (ATMs) at a United Bank of Africa Plc (UBA) branch in Lagos, Nigeria, Tuesday, November 22, 2022.
(Benson Ibeabuchi/Bloomberg via Getty Images)
The Central Bank of Nigeria limited weekly over-the-counter cash withdrawals to 100,000 naira ($225) for individuals and 500,000 naira ($1,124) for corporations, with a processing fee required to access more.
When the policy goes into effect in January, ATMs will no longer dispense the high Nigerian denominations of 1000 naira ($2.25) and 500 naira ($1.10), while withdrawals from ATMs and point terminals Sales will also be limited to 20,000 naira ($45) per day. .
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Haruna Mustafa, the bank’s director of banking supervision, said cash withdrawals may be allowed in “exigent circumstances, not to exceed once a month.”
Policymakers say the withdrawal limits and recent central bank monetary initiatives would draw more people into the banking system and curb currency hoarding, illicit flows and inflation.
FILE: Godwin Emefiele, left, Chairman of the Central Bank of Nigeria (CBN), attends the unveiling of new banknotes after Nigerian President Mohammed Buhari, right, unveiled newly designed banknotes due to counterfeiting and the growing security concerns on November 23, 2022. in Abuja, Nigeria.
(Nigerian Presidency/Anadolu Agency via Getty Images)
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But other analysts are concerned that the move could hurt everyday transactions for individuals and businesses, given the unreliability of digital payments in Nigeria.
Nigeria’s economy is heavily dependent on the “informal sector”: activities outside the legal framework and government regulation, such as agriculture, street and market trading, and public transport. In this sector, where most Nigerians work, cash is generally preferred for transactions because many lack bank accounts.
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Only 45% of adults in Nigeria have accounts at regulated financial institutions, according to the World Bank. In the absence of bank accounts, POS terminals have become one of the fastest growing areas of financial inclusion in the country.
Associated Press contributed to this report.
