More Nigeria’s commercial banks have reduced their monthly international spending limit using naira debit cards to $20 (around ₦10,000) per month.
This comes as a longstanding scarcity of foreign exchange
continues to bite Africa’s largest economy and biggest oil exporter, despite
the recent surge in global energy prices.
Nigerians can use their naira-denominated debit cards to pay
for transactions billed in US dollars online. For every purchase, debits are
made directly from their naira accounts at current exchange rates.
Before now, customers could spend up to $100 (₦50,000) on
web transactions using their naira cards but that limit has been cut by Zenith
Bank PLC and United Bank for Africa (UBA), per emails sent to customers
The banks informed their customers they were reducing the
limit from $100 to either $20 or $50 a month.
It means customers would not be able to use their naira
debit cards to pay for any transactions more than $20 or $50 in a month. It is
an indication of the banks’ struggle with scarcity of foreign exchange.
The United Bank of Africa (UBA) was first to take the
decision on February 24 when it announced $20 as its new limit.
“In line with our promise to keep you updated on services,
we have reviewed Naira Card limits for international transactions, and this
will take effect 1st of March, 2022,” the bank said.
“Remember you can use your UBA Dollar, Pounds or Euro Card
for international POS, ATM and web transactions. If you do not have one and
would like to subscribe, please visit a branch close to you.”
On Wednesday, Zenith Bank informed its customers that it was
reducing its international spending limit on its naira cards to $20 and it was
suspending international ATMs and point of sales (POS) transactions.
On Friday, First Bank announced that due to “current market
realities on foreign exchange,” it had reduced its spending limit to $50.
More banks followed on Saturday, also citing recent economic
realities.
Guaranty Trust Bank, Sterling Bank, Union bank said their
new limit was also $20 a month.
Wema Bank went a step further and said it will end its
cross-border payments with Naira cards starting March 14.
Nigeria has suffered an importation-fuelled foreign exchange
crisis for years, but the scarcity worsened in 2021 with Naira crashing over 30
per cent in one year.
As of the end of February, Nigeria’s foreign reserve fell to
$39.86 billion, compared to $40.04 billion recorded as of January ending