Digital payment drops to N38.77tn in Nigeria amid Naira scarcity

Instant electronic payment dropped to N38.77 trillion in January 2023 despite the Central Bank of Nigeria (CBN) hoping the Naira redesign policy would push digital transactions up.

The electronic payment fell by -7.75 per cent month-on-month from N42.03 trillion recorded in December 2022 to N38.77 trillion, according to data from the Nigeria Inter-Bank Settlement System (NIBSS).

Drop in digital transactions occurred amid a struggle among Nigerians to withdraw from commercial banks after the Naira redesign policy of the CBN led to a scarcity of the country’s currency.

Ripples Nigeria had reported in October 2022 that the Central Bank announced it will redesign the N200, N500 and N1,000 notes in order to mop up N2.7 trillion cash in circulation.

The apex bank said it will disburse fewer Naira notes of the same denominations after recovering the cash in circulation. It advised Nigerians to embrace a cashless society by adopting digital payment methods rather than relying on cash.

READ ALSO:RipplesMetrics: Nigerian banks earn big returns from e-transactions, as e-payments surge 613%

CBN released the new Naira notes in December and fixed January 31, 2023, as the deadline for the old banknotes to cease being legal, however, days before the deadline, commercial banks were complaining that the new Naira notes were insufficient. The deadline was later extended to February 10, 2023.

So as Nigerians were depositing their old banknotes, they were finding it difficult to withdraw new currencies. This triggered chaos as many couldn’t access money to fund their daily lives and banks’ digital payment platforms broke down.

So according to the Instant electronic payment data, Nigerians had less interest in digital payment methods in January 2023 when compared to December 2022.

Although, the drop could be linked to the yuletide period, as December often records high usage of digital payments due to the Christmas period.

But when compared on a year-on-year basis, the Instant electronic payment rose by 45.52 per cent from N26.65 trillion as of January 2022 to N38.77 trillion in January 2023.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now