From $4,000 to zero: Banks cut dollar spend on naira card -

With the suspension by some deposit money banks of the usage of naira-denominated debit cards for international transactions, the monthly spending limit for customers has dropped to zero from over $4,000 seven years ago.

In April 2015, the spending limit on naira-denominated cards for international transactions was $50,000 per person per annum or $4,166.7 per month.

Some banks recently announced the reduction of the monthly spending limit to $20 from $100, while some temporarily suspended the usage of the naira-denominated debt cards for international transactions.

The reason for the development, according to some financial analysts polled by BusinessDay, was the shortage of dollars in Nigeria following a decline in the country’s foreign exchange earnings.

“Please be informed that the monthly spend limit for international transactions on your naira-denominated debit card has been temporarily suspended. Alternatively, you can enjoy higher daily transaction limits by using our foreign currency denominated debit card, which is available in US dollar, pounds and euro variants,” Ecobank said in a note to its customers.

Zenith Bank Plc had on March 10 announced that it had temporarily suspended the use of its naira card for international ATM cash withdrawals and PoS transactions.

Akpan Ekpo, professor of economics, said the development would affect businesses that want to buy materials for production, which would lead to job creation.

A circular from the Central Bank of Nigeria (CBN) dated April 13, 2015 announced the reduction of the international spend limit from $150,000 to $50,000 per person, per annum.

“This was when the economy was more buoyant than what it is today,” Johnson Chukwu, MD/CEO, Cowry Asset management Limited, said by phone.

He said banks were responding to CBN’s directive or prompting, adding that Africa’s largest economy’s foreign exchange earnings had been declining as a result of low crude oil production.

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This, he said, had led to a decline in foreign exchange reserves, putting pressure on the central bank to defend the currency.

On the impact on the economy, Chukwu said dollar spending limit would help to conserve foreign exchange, adding that it would constrain bank customers’ ability to meet their financial obligations as they would have challenges in funding their purchases abroad.

On his part, Muda Yusuf, CEO of Centre for the Promotion of Private Enterprise, described the suspension of the usage of naira cards for international transactions as a reflection of the liquidity crisis in the foreign exchange market.

“It is a serious call for concern because it sends a bad signal to investors; in other words, it will have a negative impact on foreign investors’ confidence,” he said.

Yusuf called for a reform in foreign exchange policies, saying the government should do something urgently about the forex policies.

“The exchange rate regime is likely to become increasingly disruptive to activity in the coming months,” analysts at London-based Capital Economics said on Wednesday.

They noted that imports, based on figures from Nigeria’s three largest import partners, had fallen sharply.

“Resulting shortages of goods are probably a key factor behind the broad-based pick-up in inflation in February that pushed up the headline rate to 15.7 percent y/y. The lack of foreign currency has added to the country’s fuel shortage problem and the aviation industry has raised the prospect of flight cancellations,” they added.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.